Cenvat credit cannot be denied on mere suspicion when documentary records show manufacture, clearance, and goods movement.

Cenvat credit could not be denied merely because a third-party investigation alleged that Jammu and Kashmir suppliers were non-manufacturers or that goods were not actually moved. The Tribunal found that the assessees had produced records showing periodic departmental checks, approvals from the competent industrial and pollution authorities, and evidence of movement of raw material and finished goods. As the revenue relied only on assumption and presumption, without concrete corroborative evidence from the assessees' premises to rebut the documentary record, the denial of credit was unsustainable. The impugned orders were therefore set aside and the assessees retained the credit and consequential relief.

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Issues: Whether Cenvat credit could be denied to the assessees on the basis of allegations that the Jammu and Kashmir suppliers were not manufacturing goods and that the goods were not actually moved on record.

Analysis: The Tribunal noted that the controversy had already been examined in earlier decisions on identical facts. It found that the assessees had placed material showing periodic departmental checks, permissions from the competent industrial and pollution authorities, and evidence of movement of raw material and finished goods. The denial of credit rested on an investigation carried out at the other end, without concrete corroborative evidence from the assessees' premises to dislodge the record showing manufacture and clearance of goods. In such circumstances, the allegation that the suppliers were non-manufacturers was held to be based on assumption and presumption rather than proof.

Conclusion: Cenvat credit could not be denied, and the impugned orders were unsustainable.

Final Conclusion: The appeals succeeded and the assessees retained the benefit of the credit and consequential relief.

Ratio Decidendi: Denial of Cenvat credit cannot rest merely on an uncorroborated third-party investigation or suspicion when the record shows manufacture, clearance, and movement of goods, and the revenue fails to produce concrete evidence to rebut it.

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