2026-VIL-1356-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Cenvat Credit - Actual Physical Receipt of Inputs - Appellant, a manufacturer of aluminium products, claimed Cenvat Credit on imported aluminium scrap and other input materials - Department found that although imports were made in the Appellant's name, the scrap was diverted to third parties in connivance with co-noticees and was never physically received in the Appellant's factory - Whether Cenvat Credit can be validly claimed when the claimed inputs are not actually received in the factory - HELD - Cenvat Credit is admissible only when inputs are actually received in the factory as required under Rule 3(1) of the Cenvat Credit Rules, 2004. The documentary evidence including gate endorsements directing diversion of scrap, corroborated statements of Custom House Agents, and admissions of the Appellant itself clearly established that the imported scrap was never received in the factory. The Appellant failed to produce any cogent evidence beyond its own account ledger to support the claimed credit. The named suppliers had made no transaction or supply to the Appellant as per department investigation. The technical plea of non-admissibility of evidence raised by the Appellant was not acceptable given the facts and circumstances. The Cenvat credit has been wrongly availed in violation of Rule 3(1) and the reversal as ordered by the Commissioner (Appeals) has been rightly upheld - Central Excise Duty - Clandestine Removal of Manufactured Goods - HELD - The evidence on record including freight vouchers, dispatch details, booking registers and lowery receipt books clearly established that the Appellant cleared finished products clandestinely in collusion and connivance with co-noticees thereby causing evasion of excise duty. The admissions of the Appellant and the recipient parties were corroborated by the documentary evidence. The adjudicating authority meticulously examined all records and correctly concluded that the clearance was fraudulent. As the case involved fraud and willful suppression of facts rather than mere procedural lapses, the extended period of limitation was rightly invoked. The imposition of penalty was justified in view of the fraudulent conduct. The demand of excise duty has been rightly confirmed and penalty was imposed.
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