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TMI Blog2015 (8) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... nds, M.S. Wire etc. to the Applicant No.1 in order to claim cenvat credit under Cenvat Credit Rules, 2004. It is well known that M.S. Rounds, M.S. wire etc. are virgin material which cannot be used as scrap in the furnace. - Prima facie, it is difficult to accept that a prudent business would use virgin material as scrap and such statement is contrary to the statements of dealers and this virgin materials usually cannot be used in melting scrap in the Furnace. We find that Rule 9 (5) of Cenvat Credit Rules, 2004 provides that the burden of proof regarding admissibility of the Cenvat credit shall lie upon the manufacturer taking such credit. It is apparent from the evidences, namely statements, process of manufacture etc. that the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of castings of automobiles. They purchased MS scrap and SS scrap from registered dealers and used in the manufacture of castings. Original authority confirmed the demand of duty of ₹ 25,48,085/-and imposed penalty of equal amount along with interest on the ground that they received MS scrap but the duty paying documents were showing the goods as MS channels and angles, rods, rounds etc. It has imposed a penalty of ₹ 4 lakhs on the Managing Director (Applicant No.2). There are also penalties on all the registered dealers who supplied non-duty paid MS scrap and issued cenvat invoices with various description of goods namely M.S. Wire, M.S. Wire coil etc. as under :- S.No. Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have rightly availed credit. He also submits that initially show cause notice was issued on four second stage dealers from whom they had received the goods. After filing reply to SCN and during the hearing they pointed out that no notice was issued to first stage dealers which proves that the first stage dealers supplied M.S. Scrap and not M.S. Rounds etc. Thereafter, a corrigendum to SCN was issued and other 6 dealers were also issued with SCN. Hence, he submits that demand of duty on the basis of supplier of materials is not sustainable. According to him, initial SCN demand is related to about ₹ 7 lakhs. It is also submitted that during cross-examination of the dealers, it was deposed that they had supplied duty paid scrap o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Cenvat Credit Rules, 2004. It is well known that M.S. Rounds, M.S. wire etc. are virgin material which cannot be used as scrap in the furnace. 6. It is seen from the impugned orders that the registered dealers in the statements during investigation accepted the above facts. On the other hand, Applicant No.2, Shri A. Radhakrishnan, M.D. of Applicant No.1 company in his statement dated 24.9.2008 categorically stated the details regarding process of receiving M.S. scrap, Lab test, storage and use in the manufacturing of finished goods. In the context of the present case, he stated that they received virgin materials and treated them as scrap. Prima facie, it is difficult to accept that a prudent business would use virgin material as scr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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