Cenvat credit on non-genuine invoices without goods supply is inadmissible, and equal penalty may apply.

Cenvat credit is inadmissible where invoices are issued without actual supply or receipt of goods, and credit routed through a second-stage dealer is equally disallowed when the underlying invoices are non-genuine. The text states that the manufacturer's recorded statement admitted no goods were supplied against the invoices, supporting the finding that the credits were wrongly availed. On that basis, the matter is treated as attracting mandatory equal penalty under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. The denial of credit and the equal penalty are upheld, and the demand and penalties are sustained.

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Issues: Whether Cenvat credit taken on invoices issued without actual supply of goods was admissible, and whether equal penalty was sustainable.

Analysis: The invoices issued by the first-stage dealer were found to be unsupported by actual movement or receipt of goods, and the statement of the manufacturer recorded under Section 14 of the Central Excise Act, 1944 admitted that no goods were supplied against those invoices. On that basis, the credit taken on such invoices, including credit routed through the second-stage dealer, was held to be inadmissible. Since the credit was availed on the strength of non-genuine invoices without supply of goods, the case was treated as one attracting mandatory penalty under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944.

Conclusion: The Cenvat credit was rightly denied and the equal penalty was upheld.

Final Conclusion: The appeals failed in their entirety and the order confirming the demand and penalties was sustained.

Ratio Decidendi: Cenvat credit is not admissible where invoices are issued without actual supply or receipt of duty-paid goods, and such wrongful availment justifies equal penalty under the applicable Cenvat credit and excise penalty provisions.

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