Cenvat credit on disputed goods receipt required full examination of statutory records, so the matter was remanded.

Where Cenvat credit is disputed on the allegation that goods were not actually received through the dealer chain, the department must first establish a prima facie case of fraud or wrongful availment, after which the assessee may rebut it with statutory records and supporting documents. Here, the assessee relied on returns, RG registers, invoices, declarations and related material to show receipt of goods, manufacture of finished goods and clearance on duty payment. The HC held that these disputed factual issues required fuller examination, set aside the impugned orders and remanded the matter to the Tribunal for fresh adjudication on the existing record.

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Issues: Whether the demand of duty, denial of Cenvat credit and imposition of penalty, founded on the allegation of non-receipt of goods from the dealer chain, required fresh consideration by the Tribunal in light of the statutory records and other material relied upon by the assessee.

Analysis: The appeals turned on whether the allegation that credit had been availed without actual receipt of goods could be decided without examining the assessee's assertion that the goods were received, finished goods were manufactured and cleared on payment of duty, and the transactions were reflected in the statutory returns and RG registers. In a similar factual setting, it had been recognized that an allegation of fraud must first be prima facie established by the department, after which the onus shifts to the assessee to prove genuineness of the transactions. The Court found that the material nature of the statutory returns, registers, declarations, invoices and allied documents required a fuller examination.

Conclusion: The impugned orders were set aside and the matter was remanded to the Tribunal for fresh adjudication after considering the entire material.

Final Conclusion: The controversy on merits was left open and the Tribunal was directed to decide the credit dispute afresh on the existing record and material.

Ratio Decidendi: Where an allegation of wrongful availment of credit depends on disputed factual questions about receipt of goods and the authenticity of transactions, and the assessee relies on statutory records and related documents, the matter may require remand for a fresh decision after complete examination of the material.

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