Cenvat credit through first stage dealer upheld where invoices, payments, and receipt evidence disproved alleged non-receipt of goods.

Cenvat credit on MS ingots procured through a registered first stage dealer was upheld because the invoices showed duty-paid inputs, the dealer chain reflected receipt and onward sale of the goods, and the appellant maintained supporting book entries and cheque payments. The allegation that only documents, and not goods, were received was not established on the record. Credit could not be denied merely on suspicion in the supply chain where the buyer had taken reasonable steps expected of a purchaser from a registered dealer. The demand, penalties, and connected adverse findings therefore could not survive.

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Issues: Whether the appellant was entitled to Cenvat credit on MS ingots procured through the first stage dealer, and whether the allegation of non-receipt of goods was established.

Analysis: The Tribunal relied on the earlier final order concerning the supplier chain, which recorded evidence that MS ingots were received by the dealer and thereafter sold to the appellant, with corresponding book entries and cheque payments. It also noted that the invoices produced indicated duty-paid inputs and that the appellant had taken reasonable steps expected of a buyer purchasing from a registered first stage dealer. The record did not establish that the appellant had received only documents without goods.

Conclusion: The appellant was entitled to the disputed Cenvat credit, and the contrary allegation was not proved.

Final Conclusion: The demand, penalties, and connected adverse findings could not survive, and the appeals were allowed.

Ratio Decidendi: Where a buyer procures goods through a registered first stage dealer, maintains proper invoices and payment records, and the alleged non-receipt of inputs is not established by evidence, Cenvat credit cannot be denied merely on suspicion in the supply chain.

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