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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 ..... dit on the basis of the invoices covering the goods re-rollable scrap, scrap cutting, defective bloom, blooms, rejected rounds, slab inspection and M.S. slab end cutting without actual receipt of the same and using the same in manufacturing of final product. Therefore, a show cause notice was issued to deny Cenvat credit and recovery of the same by way of show cause notice. It was also proposed penalty on the assessee as well as Director Shri Anil Kumar Jain & Shri Ashok Kumar Jain, excise in-charge. The adjudicating authority confirmed the demand as proposed in the show cause notice of Rs. 19,89,887/- along with interest and imposed penalty on the assessee to the tune of Rs. 19,89,887/- and penalty is on Shri Anil Kumar Jain and Shri Ashok Kumar Jain of Rs. 10 lakhs and Rs. 5 lakhs, respectively. The said order was challenged before the ld. Commissioner (A) who confirmed the demand of Rs. 2,79,964/- which involved the stock of 140.630 MT of imported scrap found short during verification but allowed the Cenvat credit amounting to Rs. 17,09,923/- on re-rollable material except the amount of Rs. 30,062/-. He also reduced the penalty on assessee to the tune of Rs. 2,79,964/- but dropp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected goods supplied by M/s. Paryag Ispat Project she submits that the technical opinion was obtained out from National Institute of Secondary Steel Technology and as per the technical opinion M/s. Aggarwal Steel Rolling Mills, manufacturer was capable of producing minimum 75% normal defect free goods whereas they were showing 80% production as defective which is not correct. Therefore, Cenvat credit on re-rollable scrap was rightly denied. She relied on the decision in the case of M/s. HBR Steel Corporation vide Final Order Nos. 1579-1580/2007-SM(BR), dated 28-9-2007 wherein recovery of Modvat credit was held and imposition of penalty was confirmed. As the vehicle mentioned on the invoices were either not capable of transporting the goods or denied transported at all. She further submits that the decision of this Tribunal in the case of Neepaz Steel India - 2007 (79) RLT 676 (CESTAT-DEL) = 2007 (213) E.L.T. 100 (T) is not applicable to the facts of this case wherein it was held that demand cannot be made out on the basis of the vehicle number mentioned in the invoices. Whereas in this case corroborative evidence and statement of dealers supports the revenue's case. 4. Hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout any corroborative or supporting evidence is not sustainable. In these set of facts, I set aside the confirmation of demand of Rs. 2,79,964/- on account of shortage of inputs found on 10-8-2005. 7. On the second issue I find that the grounds taken by the Revenue for confirmation of demand are that transporting vehicles are non-existent and dealers have stated that there selling the goods on ex-delivery/ex-godown basis and they have no concern with the transportation of the goods. Therefore, the only reason to deny Cenvat credit on re-rollable scraps is mainly on account of mode of transportation of the said scrap is not correct. But the revenue failed to give any evidence for procurement of the scrap by the appellant for manufacturing their final product. Moreover, the Revenue have not adduced any evidence if the dealer has sold re-rollable scrap on ex-godown basis then where the scrap has gone. The another ground of the Revenue is that re-rollable scrap is costlier than the other scrap and same cannot be an input. In this regard, I observe that the, assessee has procured 9246.582 MT re-rollable scrap during the impugned period, but Cenvat credit is sought to be denied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is acceptable particularly when they are disclosing even the personal details of the registered dealer who is being alleged to be non-existent by the department. Therefore, it could not be alleged that M/s. Reena Ispat Udyog MGG is non-existent dealer and no adverse effect of their being non-available at the time of investigations could be drawn in respect of the impugned goods. 10. Further in the case of rejected rounds supplied by M/s. Prayag Ispat Project MGG to the appellant it has been disputed that the goods supplied were not the rejected rounds. Facts of the case revealed that the goods supplied to the appellant were purchased by M/s. Prayat Ispat Projects MGG from M/s. Aggarwal Steel Rolling Mills and Metal Industries of Mandigobindgarh and the allegation is that both these units were capable of producing 75% normal defect free goods whereas they were showing 80% of their clearance as defective. The adjudicating authority while dealing with this issue in the impugned order has recorded that the appellant had remained silent on their so called receipts from M/s. Prayag Ispat Projects MGG. This finding of the adjudicating authority is not factual. From the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices alleged to be not of goods transport vehicles - Dealer received payment from various manufacturers through cheques and demand drafts and inputs supplied were duly received by manufacturers and used in goods manufactured which were cleared on payment of duty - No evidence that manufacturers used some alternative raw material than which was mentioned in invoices - Penalties set aside - Rule 25 of Central Excise Rules, 2002. [paras 3, 5]" The fact of the present case are identical to the above said case law. The payments were made by the appellants to the dealers through banking channels and there were no evidences on records which prove that manufacturers used some alternative raw material than which was mentioned in invoices. Therefore, in view of the said case law demand cannot be made out only on the basis of the vehicle numbers mentioned in the invoices. Further, I find that the transport companies were assumed to be non-existent only on the basis that they did not respond to the summons. From the facts, it is seen that all the transporters were situated at Mandi Gobindgarh but there is no mention of any investigations conducted by the department in this regard. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he grounds of appeal the appellant have submitted the year wise detailers of the quantity of scrap and re-rollable material received during the period 2002-03 to 2005-06 as under :- Year Scrap (MT) Re-rollable material (MT) Total quantity (MT) % age of re-rollable material purchased 2002-03 9426.355 1265.045 10691.400 11.83% 2003-04 10478.540 3083.280 13561.820 22.73% 2004-05 9147.938 4591.982 13739.920 23.42% 2005-06 11506.440 306.275 11812.715 2.59% Total 40559.273 9246.582 49805.855 18.56% The appellant submit that they received 40559.273 MT of scrap and 9246.582 MT of re-rollable material and only 1082.950 of the re-rollable material out of total quantity of 9246.582 MT of the same which works out to be 2.17% of total scrap consumed in the manufacture of final products, is disputed. This shows that the adjudicating authority has accepted that 8163.632 MT (i.e. 9246.582 MT minus 1082.950 MT) of the re-rollable material has been consumed in the manufacture of the final product. It is observed that the adjudicating authority has taken an inconsistent view while dealing with the same type of goods, i.e., re-rollable material. If the allegation is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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