2026-VIL-974-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Cenvat Credit on invoices of bogus/non-existent suppliers, Invocation of extended period of limitation - The invoices showed abnormally high values without indicating fabric width or variety. Multiple suppliers shared the same address, delivery challans were signed illegibly without disclosure of identity or designation - Whether the appellant is entitled to avail Cenvat Credit on invoices issued by fake/non-existent suppliers - HELD - The Rule 7(2) of the Cenvat Credit Rules casts a duty upon credit availers to take all reasonable steps to ensure inputs are duty-paid and to verify the identity and existence of suppliers. The appellant failed to satisfy this requirement by not conducting proper verification of supplier identity and genuineness of transactions - The invoices themselves displayed multiple red flags including abnormally inflated values, absence of fabric specifications, common addresses among different suppliers, illegible signatures on delivery challans without identity disclosure, and absence of transport details. These circumstances collectively demonstrate that the appellant knowingly availed credit on false documents - Similar modus operandi was widely prevalent among fabric processors in Surat, as indicated by alert circulars issued by the DGCEI. The concurrent findings of all lower authorities regarding the fake nature of invoices and supplier non-existence support invocation of extended period under Section 11A(1) of the Central Excise Act, 1944 - The appellant's contention regarding principle of natural justice is rejected as the request for documents was made after adjudication order and was never raised during the show cause notice stage - The impugned order confirming recovery of availed Cenvat Credit along with interest and equal penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 is upheld – The appeal is dismissed
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