2026-VIL-1797-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Denial of Cenvat Credit on the allegation of receipt of invoices without goods from first stage and second stage dealers - Reliance on statements recorded during investigation without following Section 9D of Central Excise Act, 1944 – Appellant availed Cenvat Credit on invoices issued by two second stage dealers. On the basis of an investigation, it was alleged that the dealers were non-existent and had issued fake invoices without supplying goods - Whether Cenvat Credit can be denied to the Appellant on the basis of statements of the dealers, recorded during investigation, when the procedure under Section 9D was not followed and no other evidence was produced to show that the goods were not received - HELD - The Appellant is a manufacturer of dutiable goods paying duty on its finished goods. If the allegation is that the inputs were not received, the investigation could not find out from where the inputs used for manufacture of the finished goods were procured. No investigation was conducted with the transporters who could have brought out from the records whether the goods were transported or not - The allegation that the first stage and second stage dealers were non-existent is controverted by the SCN itself, as the dealers appeared before the investigating team and their statements were recorded. The only evidence being the statements of the dealers that they had not supplied goods and had issued fake invoices, the provisions of Section 9D of Central Excise Act were required to be followed to rely on them. As that was not done, the statements recorded during investigation are not reliable. The Revenue produced no other evidence to allege that the Appellant had availed Cenvat Credit without receiving the goods. The impugned proceedings are therefore not sustainable against the Appellant - The impugned order is set aside and the appeal is allowed
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