Cenvat credit denial upheld where invoices did not match physical receipt and suppression justified extended limitation

Concurrent factual findings that inputs were not physically received, and that invoice entries and stock records were inconsistent, supported denial and recovery of Cenvat credit. The authorities also accepted, on facts, the alternative case that credit had been taken without reversal after removal of the goods. On the same factual basis, suppression of true transaction details justified invocation of the extended period of limitation. The note states that the challenge failed because the dispute turned on evidence and no question of law arose in the absence of perversity.

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Issues: (i) Whether denial and recovery of Cenvat credit taken on the strength of invoices was justified when the goods were found not to have been physically received; (ii) Whether the extended period of limitation was rightly invoked on the basis of suppression and incorrect availment of credit.

Issue (i): Whether denial and recovery of Cenvat credit taken on the strength of invoices was justified when the goods were found not to have been physically received.

Analysis: The Revenue authorities and the Tribunal concurrently found, on the basis of physical stock verification and RTO reports, that the vehicle numbers shown in the invoices were not capable of transporting the alleged goods and that the inputs were not actually delivered to the factory. The explanation that the entries were made due to human error was rejected as implausible in view of the repeated discrepancies and the supporting material on record. The alternative case that the goods, even if received, were removed without reversal of credit was also accepted on facts.

Conclusion: The denial and recovery of Cenvat credit was upheld in favour of the Revenue.

Issue (ii): Whether the extended period of limitation was rightly invoked on the basis of suppression and incorrect availment of credit.

Analysis: The authorities held that the assessee had not disclosed the true nature of the transactions and had maintained false entries regarding receipt and removal of inputs. In view of the finding that the credit was wrongly taken and the facts were withheld from the Department, the invocation of the extended period was sustained.

Conclusion: The extended period of limitation was rightly invoked in favour of the Revenue.

Final Conclusion: The concurrent factual findings disclosed no question of law, and the challenge to the orders confirming denial of credit, interest, penalty, and limitation failed.

Ratio Decidendi: Concurrent findings based on reliable evidence that inputs were not physically received, or were removed without reversing credit, justify denial of Cenvat credit and invocation of the extended limitation period in the absence of perversity.

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