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TMI Blog2015 (6) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods - Held that:- Commissioner (A) has correctly analyzed the issue and hold that Cenvat credit on re-rollable scrap cannot be denied merely on the basis of the statement of the transporters or vehicles are found to be non-existent. Further, Revenue has failed to produce any corroborative evidence. In these circumstances, find that demand is not sustainable against the assessee. - Decided in favour of assessee - E/2052, 2053/2008-EX(SM) and E/1793, 1900/2008-EX(SM) - Final Order Nos. A/51782-51785/2015-EX(SM) - Dated:- 5-6-2015 - Shri Ashok Jindal, Member (J) Shri Sudhir Malhotra, Advocate, for the Appellant. Ms. Ranjana Jha, DR, for the Respondent. ORDER Both the Revenue as well as assessee are in appeals against the impugned orders. Therefore, all the appeals are disposed of by a common order. 2. The facts of the case are that the assessee is a manufacturer of alloy/non-alloy steel ingots. On 10-8-2005 a physical verification of stock was done and it was revealed that the assessee has availed Cenvat credit on re-rollable scrap during the period 2001-2006. It was also alleged that the assessee has clandestinely sold 140.630 MT of imported heavy melt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory of the assessee and was not used in their furnance as the same was taken fraudulently as transporters were found non-existent, vehicle No. mentioned in the GR produced by the assessee were of scooter, motor cycle, car, etc. Out of 18 dealers 17 dealers in their statement stated that their sale was on ex-delivery and ex-godown basis and they denied transportation of the said goods. They also denied their involvement in the loading impugned material in the trucks mentioned in the invoices or have any knowledge about existence of transporters. The remaining dealer was not found at the given address. The transporters were also found non-existent and vehicle number mentioned in the invoices were either of scooter, motors cycle, car, etc., which was not capable of transporting said goods. One transporter Shri Amrik Singh also denied for transporting any goods. She further submits that the statement recorded under Section 14 of the Central Excise Act, 1944 is having evidentiary value as compared to the statement recorded under Section 193 and Section 228 of IPC, 1860. She further submitted that Shri Ashok Kumar Jain and Shri Anil Kumar Jain were aware of the day-to-day activities of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee was also having the stock of steel scrap non excisable of 175.965 MT as on 10-8-2005 on which no credit was taken. It is the statement during the course of investigation on 10-8-2005, the shortage were explained by Shri Ashok Kumar Jain that the shortage might be of burning loss as they were not issuing inputs for manufacture of final product by exact weighment and same has been issued on approximate basis. The imported scrap contains material like dust, cemented material, etc., and due to presence of these material burning loss is higher and they are not taking same into account at the time of issuing scrap for manufacturing and recording the same in their stock register. Therefore, during the period on 4 years the shortage might be given on account of burning loss of scrap. To support this contention it was relied on the decision in the case of Rana Paper Ltd. v. CCE - 2008 (228) E.L.T. 271 (Tri.). I find that the contention of the assessee is correct as the huge stock of 639 MT cannot be weighed in a single day physically. Moreover, the reasons for shortage has been explained by Shri Ashok Kumar Jain that scrap is having dust, cemented material, good, etc., and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n invoices/GRs were fake and were also found to be of non-transport vehicles like scooter, car, etc. Further, it has been recorded that re-rollable scrap and defective blooms, billets, etc., are not input for manufacture of steel ingots being, not cost effective. 9. The allegation is that the appellants took Cenvat credit amounting to ₹ 17,09,923/- on re-rollable material fraudulently without actual receipt of the same in their factory and diverted the same to small scale re-rolling mills without issue of invoice but no corroborative evidence has been brought on record by the department to prove that the said goods were actually diverted by the appellant to other units in respect of which no investigation was caused. One piece of evidence relied upon to sustain the allegation is that M/s. Reena Ispat Udyog MGG, a registered dealer, who has supplied the impugned goods to the appellant was fond to be non-existent. The appellants submit that investigations in this case were caused in Oct. to December, 2005, i.e., after more than 2 Years of supply of goods. M/s. Reena Ispat Udyog MGG, the registered dealer had already closed their firm due to internal problems. However, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd even otherwise those statements have not deposed that the impugned goods supplied to M/s. Prayag Ispat Projects MGG by M/s. Aggarwal Steel Rolling Mills and Metal Industries MGG were not the rejected rounds but primary material. Therefore, the findings of the adjudicating authority do not sustain in this regard. 11. It is further observed that the departmental investigation is directed only towards transportation of goods to the appellant s premises. The case has been made out on the ground that the transport companies whose GRs were produced by the appellants in this regard were found to be non-existent and the vehicle no. shown in invoices/GR s were also fake and were also found to be of non-transport vehicle like scooter, car, etc. On the other hand, the appellant contend that vehicle Nos. are mentioned on the invoice at the instance of driver; neither consignor verifies the registration certificate of vehicle before loading the consignment nor consignee does the same at the time of taking delivery and it is incorrect to disallow credit without appreciating the corroborative evidence on record. In this regard the appellants are relying upon the decision of the Hon ble CEST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods having been transported to their unit at Malerkotia. It is observed that but for issuing summons to the transport agencies who issued the GRs, no enquiries were caused from them to verify the particulars of GRs submitted by the appellants. Therefore, the contents of the GRs have to be accepted and in that situation there does not remain any dispute regarding the transportation of the impugned goods to the premises of appellant s unit. 13. The demand sustains only in respect of inputs purported to be transported vide Truck No. PB-11U5595, owner of which in this statement dated 23-5-2006 had denied transportation of the same to the appellant s premises. However, in the case of other consignments of re-rollable material the department has failed to prove the allegations with the corroborative evidence to substantiate the charge. Therefore, the demand of Cenvat credit confirmed by the adjudicating authority in respect of re-rollable materials sustains only in the case of consignment involved in Truck No. PB-11U5595 and the rest of the demand does not sustain which is set aside. 14. The other ground for disallowing the Cenvat credit is that the impugned goods were not cos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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