CENVAT credit without actual receipt of inputs was disallowed where the assessee failed to rebut shortage and valuation findings.

CENVAT credit taken on invoice basis without actual receipt of inputs was held inadmissible where the claimant admitted such availment and offered no credible rebuttal. The burden under Rule 9(5) of the CENVAT Credit Rules, 2004 was not discharged, as no contemporaneous records, police complaint, or other evidence supported the plea of pilferage or mud deposition. The shortage valuation was also left unrebutted, and the natural justice objection failed because opportunity to reply and be heard had been provided. On these facts, the confirmation of duty, interest and penalties was upheld.

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Issues: Whether the confirmation of duty, interest and penalties for alleged wrongful availment of CENVAT credit without actual receipt of inputs and for shortage of raw materials warranted interference.

Analysis: The appellants admitted availment of CENVAT credit on a substantial quantity of raw material on invoice basis without actual receipt, and no plausible explanation was offered for such availment. The admission was treated as sufficient proof, and the appellants failed to produce any rebuttal evidence to substantiate the plea of pilferage or mud deposition, including any police complaint or contemporaneous record. The valuation adopted for the shortage was also not rebutted, and the plea of violation of natural justice was rejected because opportunity to reply and be heard had been provided. In view of the burden placed on the claimant under Rule 9(5) of the CENVAT Credit Rules, 2004, the appellants did not establish admissibility of the credit or any ground to disturb the adjudication.

Conclusion: The confirmation of duty, interest and penalties was upheld and the appeals were dismissed.

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