Cenvat credit denial upheld where admitted invoice-only transactions without goods movement proved fraudulent availment and penalty

Cenvat credit was denied where recorded statements and the documentary record showed that invoices were issued and dealt with without any movement of goods. The Tribunal treated the admitted invoice-only transactions, including the recipient's acknowledgment that the invoices were not checked against actual goods and that the inadmissible credit had been reversed, as sufficient to establish wrongful availment of credit through fictitious transactions. It held that, once fraud was established from the admissions and supporting documents, no further corroboration from transporters, brokers, or other witnesses was necessary. The consequential penalty was therefore sustained.

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Issues: Whether the appellant was liable to denial of Cenvat credit and consequential penalty on the basis of fake Cenvatable invoices issued without movement of goods.

Analysis: The statements recorded under Section 14 of the Central Excise Act, 1944 established that the manufacturer had issued invoices without accompanying goods and that the dealer and the recipient had dealt in such invoices. The recipient's statement also showed that the invoices were not verified against actual goods and that the inadmissible credit was voluntarily reversed. The Tribunal held that, once the admitted facts showed that only invoices moved and no goods were dispatched, no further corroboration from transporters, brokers, or other witnesses was to sustain the finding of fraud. The confessional statements, supported by the documentary record, were sufficient to show that the Cenvat credit had been wrongly taken through fictitious transactions.

Conclusion: The denial of Cenvat credit and the consequential penal action were upheld.

Final Conclusion: The appeal failed because the evidence of admitted invoice-only transactions and fraudulent availment of credit justified the orders below.

Ratio Decidendi: A confirmed admission that invoices were issued without supply of goods is sufficient to sustain denial of Cenvat credit and related penalty, and no further corroborative evidence is necessary where the fraud is otherwise established.

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