FINAL ORDER NO. 60342-60343/2026

DATE OF HEARING: 22.04.2026

DATE OF DECISION: 29.04.2026

These two appeals are directed against the common impugned order dated 22.05.2024 passed by the Commissioner (Appeals) CGST, Ludhiana whereby the Commissioner (Appeals) has rejected the appeals of the appellants and upheld the Order-in-Original.

2. Briefly the facts of the present case are that appellants are engaged in the manufacture of Iron & Steel Ingots. Acting on the information received from a reliable source in erstwhile DGCEI, Regional Unit, Ludhiana (now DGGI, Zonal Unit, Ludhiana), investigation was initiated against M/s Mahadev Alloys, G.T. Road, Khanna Side, Mandi Gobindgarh (hereinafter referred to simply as "Mahadev") and it was observed that it was engaged in passing on fraudulent cenvat credit by issuing forged dealer invoices to various furnace units. M/s Mahadev Alloys had passed on this fraudulent Cenvat credit after showing fake purchases of duty paid excisable goods viz. MS scrap from a Raipur based Central Excise dealer firm viz (i) Prakash Enterprises, Block No. 10, Plot No. W- 1/166, Rawabhata Transport Nagar, Raipur (herein after referred to as Prakash) and (ii) Shri Ram Power & Steel Pvt. Limited (Unit-II), Khata No. 198/300, Plot No. 200, Village Bonggabar, Ramgarh (hereinafter referred to as "SRPSPL"). During investigation of Prakash, it was revealed that Prakash had neither shown purchase nor sale of any excisable goods at any time during central excise regime.

2.1. On scrutinizing the sale/purchase records of Mahadev for F.Y. 2016-17, it was revealed that although Mahadev had never made any transactions (viz. purchase of excisable goods) with both the dealer firms viz. Prakash and SRPSPL, but Mahadev was found to have passed on fraudulent Cenvat credit to various furnace units of Punjab. It was also revealed that Mahadev had shown fraudulent purchase of excisable MS scrap from dealer firm Prakash, which, in turn, had shown fake purchases from two source manufacturing units based in Odisha namely (i) Shyam Metalics and Energy Ltd., Sambalpur and (ii) Mecon Engineering Works, Burdwan. Information was sought from the two afore-said source manufacturers. It was divulged that the source manufacturers neither sold any goods nor issued any excise invoices to Prakash. Similarly, Mahadev had shown purchases from a Central Excise dealer firm based in Ramgarh (Jharkhand) namely SRPSPL. Moreover, in the sale invoices issued by Mahadev during the month of December, 2016, it was also shown/reflected by Mahadev that SRPSPL had purchased MS Scrap from a source manufacturing unit based in West Bengal namely Mecon Engineering Works, Burdwan. However, on analyzing the Central Excise dealer return of SRPSPL for the quarter October-December, 2016, it was divulged that SRPSPL had filed NIL return for the afore-said quarter with remarks 'No transaction in this period. As such, it was clear that SRPSPL had neither purchased any (excisable) goods from Mecon Engineering Works, Burdwan nor sold any (excisable) goods to Mahadev during the month of December, 2016 and Mahadev appeared to have issued fake cenvatable invoices during December, 2016 too after showing fake purchases from SRPSPL, Further, this fact was also corroborated from the analysis of ICC transaction data/details of Mahadev for F.Y. 2016-17 wherein it was divulged that Mahadev had never imported/purchased cenvatable M.S. Scrap at any time during the afore-said period from any dealer outside Punjab. Hence from the undergoing investigation, it was clearly established that Mahadev had never made any genuine purchases and had rather passed on fraudulent Cenvat credit, in connivance with Prakash and SRPSPL, by issuing forged dealer invoices to various furnace units.

2.2. Further, on scrutinizing the sale records of Mahadev and on analysing the VAT-23 returns of Mahadev, it was revealed that Mahadev had passed on inadmissible cenvat credit to a unit namely Durga Concast Pvt. Lt