Cenvat credit on railway freight allowed where consignor certification supported the claim and penalty was set aside.

Cenvat credit on railway freight was allowed where the consignor certified that corresponding credit had not been availed and the railway receipts contained the required particulars supporting the claim. The credit claim was accepted to the extent of the certified amount because the record established compliance for that portion. For the remaining disputed amount, verification of the certificate or other supporting documents was required before credit could be allowed. The consequential penalty was set aside.

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Issues: Whether the appellant was entitled to Cenvat credit on the basis of railway receipts where the consignor had not availed the corresponding credit and whether the denial of credit and consequential penalty were sustainable.

Analysis: The dispute turned on the admissibility of credit for service tax paid on railway freight used for transportation of inputs. The relevant record showed that the consignor had certified that credit had not been availed to the extent of the disputed amount, and the railway receipts contained the essential particulars supporting the claim. On that basis, the appellant was held entitled to credit for the certified balance. For the remaining disputed amount, the matter required verification of the necessary certificate or other supporting documents before credit could be allowed.

Conclusion: The appellant was held entitled to Cenvat credit to the extent of the certified amount, the balance was remanded for verification, and the penalty was set aside.

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