TaxTMI 
TaxTMI 
2009 (10) TMI 767
X X X X Extracts X X X X
X X X X Extracts X X X X
....from Rs. 1,31,340/- to Rs. 65,000/-. 2. Ld. Counsel for ML submitted that ML is engaged in manufacture of Hot rolled Coils, Cold Rolled Coils & sheets. While manufacturing these goods, certain waste is generated in the form of scrap known as HR Trimmings. These trimmings are sold by way of auction through an internet portal steelrx.com, wherein anyone wanting to bid can enroll. The highest bidder is given the award. The highest bidder buyer or his client gets the demand draft/pay order and also arranges for transportation for picking up the material from IIL's premises, as the sales are on cash basis; that sales are ex-factory insofar as IIL is concerned. IIL clears -the HR trimmings on payment of appropriate duty of excise under the cover....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oncerned, it had paid appropriate duty of excise on clearance of HR Trimmings and, therefore, what happens further to the goods is not its concern. The said decision has not been set aside or stayed. Further, Ld. Counsel submitted that in any case there was never a proposal to hold the goods liable to confiscation & also there is no finding to that effect either in the adjudicating authority's order or in the Commissioner (Appeal)'s order. Hence, the penalty under Rule 26 cannot be imposed, without holding the goods liable to confiscation. Reliance was placed on the following amongst other cases - (a) Castrol India Ltd v. CCEx - 2008 (222) E.L.T. 408 (Tri.-Mumbai). (b) Hetero Drus Ltd. v. CC....
X X X X Extracts X X X X
X X X X Extracts X X X X
....factory of IIL, they were diverted to the Viramgam/lndore based Hard Binding wire factories, who were not in the cenvat chain. However, the credit was availed by the First stage dealers viz. M/s. Shree Durga Iron & Steel Co. Pvt. Ltd or M/s. Jai Ambe Steel Co., who had issued invoice in favour of M/s. Nagpal Steels, who in turn issued invoice in favour of M/s. KSB Pumps. Ltd, and consequently, M/s. KSB Pumps availed credit on the basis of 2nd stage dealer's invoice. 7. I find that even as per Department's case, IIL was never involved in the alleged cenvat fraud as can be seen from the impugned order at page 1, wherein while stating the facts of the case, Ld. Commissioner (Appeals) had observed as under- "These unregistered small scale man....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mbai) are identical. The relevant findings of the Tribunal in the said case are reproduced below - "8. From the plain reading of the above said rule it is to be very clearly understood that provisions of Rule 26(2) will not apply to the case as this sub-rule came in the statute book w.e.f. 1-3-2007. This takes us to provisions of Rule 26(1). Provisions of Rule 26(1) can be applied to any person who has knowledge or has reason to believe that the goods are liable for confiscation under the Act. In this case it is undisputed, that, when the appellant company cleared the consignments of scrap from their factory premises; they had prepared the invoices on the value which was declared by them. It is also undisputed that excise duty on such scra....