Documentary proof of receipt defeats bogus-invoice allegations, and lack of suppression bars extended limitation and penalty.

Cenvat credit could not be denied merely on allegations that invoices were bogus where GRs, accounts and other records showed receipt and accounting of zinc ingots, and the department relied on oral statements that were neither tested by cross-examination nor supported by independent enquiry. The credit denial was therefore set aside. The extended period of limitation also could not be invoked because the evidence did not establish suppression, misrepresentation or intent to evade duty; the show cause notices were issued beyond the relevant period and were time-barred. Penalties founded on the same allegation were likewise unsustainable, and the orders-in-original were set aside.

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Issues: (i) Whether Cenvat credit could be denied on the allegation that invoices were bogus and goods were not actually received. (ii) Whether the show cause notices were barred by limitation and the penalty was sustainable.

Issue (i): Admissibility of credit was examined against the documentary record, including accounts and GRs showing receipt of zinc ingots in the factory and accounting of the goods in books. The statement relied upon by the department was not subjected to cross-examination by the assessee, the corroborative statement had been retracted, and no independent enquiry was made to disprove the supplier chain or the appellant's records. Mere reliance on oral statements, without rebutting the documentary evidence, was found insufficient to deny credit.

Conclusion: The denial of Cenvat credit was unsustainable, and the finding of availment of irregular or bogus credit was set aside.

Issue (ii): Since the evidence did not establish suppression, misrepresentation, or any intent to evade duty, the department could not invoke the extended period of limitation. The show cause notices were issued after the relevant period of 2011-12 to 2012-13, and in the absence of a sustainable allegation of fraud or suppression, the demand was time-barred. Penalty based on the same foundation also could not survive.

Conclusion: The demands and penalties were barred by limitation and were not sustainable.

Final Conclusion: Both orders-in-original were set aside and the appeals were allowed.

Ratio Decidendi: Documentary evidence of receipt and accounting of goods cannot be displaced by untested or unrebutted oral statements, and in the absence of proof of suppression or intent to evade duty, the extended period of limitation and consequential penalty cannot be invoked.

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