Fake invoice Cenvat credit is inadmissible; extended limitation and director penalty were sustained.

Cenvat credit taken on fake invoices was held inadmissible because the assessee was obliged to verify the genuineness of supporting documents before availing credit. The use of fraudulent invoices justified invocation of the extended limitation period for recovery under section 11A of the Central Excise Act, 1944, and the benefit of section 11A(2B) was denied because the duty was paid under protest. The penalty imposed on the Director was also sustained under rule 26 of the Central Excise Rules, 2002. The demand, interest, and penalties were upheld.

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Issues: Whether Cenvat credit taken on fake invoices was admissible, and whether the demand, interest, and penalties under the extended limitation period were sustainable.

Analysis: The credit was taken on invoices found to be fake, and the assessee was held responsible to verify the genuineness of the documents before availing credit. Since the invoices were fraudulent, the credit was treated as inadmissible under the Cenvat scheme. The Tribunal further held that the case involved fraud and use of fake documents, attracting the extended period for recovery under section 11A of the Central Excise Act, 1944, and the benefit of section 11A(2B) was unavailable because the duty was paid under protest. The penalty on the Director was also upheld under rule 26 of the Central Excise Rules, 2002.

Conclusion: The demand, interest, and penalties were upheld, and the assessee's challenge failed.

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