CENVAT credit denial upheld where alleged goods diversion and invoice-only transactions matched an earlier Tribunal pattern.

CENVAT credit was denied where the record showed alleged diversion of goods and issuance of invoices without receipt of goods. The Tribunal found the proceedings, modus operandi, recorded statements and role of the participants materially identical to an earlier decision involving the same scrap procurement and invoice transmission pattern. As the defence raised was also the same as in that matter, the earlier Tribunal ruling was followed and the findings confirming denial of credit, interest and penalties were left undisturbed. The challenge therefore failed and the appeals were rejected.

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Issues: Whether the denial of CENVAT credit and consequential penalties on the basis of alleged diversion of goods and issuance of invoices without receipt of goods were sustainable.

Analysis: The proceedings, modus operandi, statements recorded under section 14, and the role of the common participants were found to be materially identical to those considered earlier by the Tribunal in a case involving the same pattern of procurement of scrap, alleged diversion of goods, and transmission of invoices to the buyer. The defence raised by the appellants was also found to be the same as in the earlier matter. Following the earlier Tribunal decision on the identical factual matrix, the impugned findings confirming denial of credit, interest, and penalties were not interfered with.

Conclusion: The challenge to denial of CENVAT credit and penalties failed, and the appeals were rejected.

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