Cenvat credit on fabrication inputs and compliant invoices cannot be denied absent contrary facts or substantive document defects.

Cenvat credit was held admissible on iron and steel items used to fabricate capital goods and support structures for cranes and connected manufacturing equipment, because credit must be tested on receipt and use of inputs, not by a rigid one-to-one correlation with each finished item; the evidence showed use in the factory and there was no contrary factual basis to deny it. Credit was also admissible on invoices treated as improper, since the documents substantially contained the required particulars, including address, registration details and separately indicated duty. The credit disallowance and related penalties were therefore set aside, with consequential relief to the assessee.

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Issues: (i) Whether Cenvat credit was admissible on iron and steel items allegedly used in fabrication of capital goods and support structures for cranes and connected manufacturing equipment. (ii) Whether Cenvat credit was admissible on the basis of invoices treated as improper documents for want of prescribed particulars.

Issue (i): Whether Cenvat credit was admissible on iron and steel items allegedly used in fabrication of capital goods and support structures for cranes and connected manufacturing equipment.

Analysis: Credit was to be examined with reference to the receipt and use of the inputs, and not on any rigid one-to-one correlation between each item and each finished capital good. The record showed that the disputed materials were found to have been used for fabrication of capital goods and structures essential for the manufacture of dutiable final products. In the absence of any allegation of clandestine removal or contrary factual basis to deny use in the factory, the disallowance of the major credit was unsustainable.

Conclusion: The disallowance of Cenvat credit on the iron and steel items was not justified and the credit was admissible in favour of the assessee.

Issue (ii): Whether Cenvat credit was admissible on the basis of invoices treated as improper documents for want of prescribed particulars.

Analysis: The invoices on record were found to be in proper format and to contain the appellant's address and relevant tax registration particulars, with excise duty separately indicated. The factual foundation for treating the documents as non-compliant was therefore incorrect, and the credit could not be denied on that basis.

Conclusion: The credit based on the invoices was admissible and the denial was unsustainable.

Final Conclusion: The impugned order was set aside to the extent of the credit disallowance and related penalties, and the appellant succeeded with consequential relief.

Ratio Decidendi: Cenvat credit cannot be denied by insisting on a strict one-to-one correlation where the evidence shows receipt and use of the inputs in the manufacture or fabrication of eligible capital goods, and credit cannot be disallowed on an invoice objection when the documents substantially satisfy the prescribed requirements.

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