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TMI Blog2005 (7) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... scrap of steel; on various dates vide declarations filed as prescribed under the rules - (b) Such scrap, is the principal raw material. Since the scrap received and its chemical composition is of great importance, each lot received is tested by a spectrometer. (c) Based on certain information, the Preventive officers started an enquiry; recorded statements of employees, dealers who had supplied the scrap and a show cause notice was issued, alleging for the period October 1996 to March 2001 that - (i) Assessee had availed credit an inputs viz. H.R. Trimmings M.S. Scrap, ferrous waste scrap, off cuts of M.S. Sheets etc. even though the same could not be used as input in the manufacture of castings as per specification. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stage dealers. Under Rule 209A of Central Excise Rules, 1944 read with Rule 26 of Central Excise (No. 2) Rules, 2001. 1.5 Assessee, (M/s. BCL for short) was demanded Rs. 1,05,18,891/- after denying the credit on the invoices of M/s. Mehta Trading Corporation M/s. National Steel Traders under the provision of Rule 57-I(i)(ii) read with Rule 57AH(i) Rule 12 of Central Excise Rules, 2001 read with proviso to Section 3A of the Central Excise Act, 1944, a penalty of equivalent amount was imposed on M/s. BCL under Rule 13(2) of Cenvat Credit Rules, 2001 read with Section 11AC of Central Excise Act, 1944 and the demands were to be discharged with intend under the provision of Rule 57-I(5) read with Rule 57AH(i), Rule 12 of Cenvat Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Excise invoice description explained is due to an arrangement for Banking purposes. (e) The Commissioner has arrived at his conclusions - (i) The lower price charged by the first stage dealer for sales, would it self show that they had not sold the same material that was purchased from original manufacturers. (ii) Shri Abdul Khan, Partner of M/s. Kohinoor Trading Co. accepted the fact of segregation of good quality scrap sale separately of such select items at higher prices. Remaining scrap at lower prices was sold than the purchase price at which it was procured from manufacturers where scrap arose to M/s. Mehta Trading Corporation M.S. Scrap cutting off cuts etc. may not be the goods received as descri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ap", in this case to be less or more will not induce us to go hunting to establish an alleged case of ineligibility to credit. We find that price paid to a dealer has no relevance to the credit eligible. 2.3 The other main issue to be considered is whether the description of 'CRCA scrap' actually observed and M.S. offcuts etc. mentioned on the duty documents should lead to a conclusion that the inputs allegedly received and taken credit, were not covered by the duty paid documents. The Commissioner appears to be swayed into believing the statement of functionaries of the assessee viz. Shri N.D. Tiwari that M.S. Sheet offcuts were not received but orders were placed for supplying 'CRCA sheet punched scrap' the same was received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is being made out in these proceedings. There is no material on record to indicate that offcuts are differently valued than "CRCA sheet scrap" per unit. In fact the charge are of higher values for "CRCA scrap" that M.S. Sheet offcut scrap is the case of Revenue. When duty has been paid on a lesser value then remedy is not to deny the benefit of credit of actual duty paid but was to alert the manufacturers jurisdictional officers to start proceedings to enhance the scrap values. Credit cannot be denied as availed. The alternate submission of M/s. Bajaj Auto Scrap classification being in doubt also would go to explain the difference no men clause. 2.4 There is a finding of segregation by scrap being conducted at first dealers premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it only the remainder quantity at pro rata duty. There appears to be nothing improper in this approach that cannot call for denial of the credit on invoices issued by such dealers. They had received the scrap classified as 'M.S. Offcuts of M.S. Sheets'. Same we sorted out, thereafter sent as "M.S. Scrap". Mere change of nomenclature, will not call for denial of credit. 2.6 This Tribunal in the case of Singh Scrap Processors Ltd. v. CCE, Mumbai - 2002 (143) E.L.T. 619 (Tri.) had held that removal of impurities in the scrap purchased compressing with aid of mechanical press to form billets would amount to manufacture. If the dealers activities, amounted to manufacture, as per this decision then the dealers should have been brough ..... X X X X Extracts X X X X X X X X Extracts X X X X
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