TaxTMI 
TaxTMI 
2011 (5) TMI 722
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....olling Millls. (I) Stay Application No. E-3159 of 2010 in Appeal No. E-3370 of 2010 and (II) Stay Application No. E-3145 of 2010 in Appeal No. E-3360 of 2010 2. The Appellant firm are manufacturers of Steel Round, Steel Bars and Cold Twisted Steel Bars (CTD Bars) falling under chapter 7214.90 of the Central Excise Tariff. These materials are commonly used in construction of buildings. During the process of manufacture of such goods from steel ingots some waste materials emerge which is accounted as melting scrap falling under 7204.90 of the Tariff and sold to furnace units for melting it to manufacture steel ingots. 3. A case was made out by the department against the Appellant....
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....e relevance of the date 23-11-2004 is that there was a check conducted by the central excise department at the Appellants' factory on that date. (ii) An expert opinion was sought by the department from the Director of National Institute of Secondary Steel Technology, Mandi Gobindgarh as to what will be the normal defect free production in the Appellant's factory. The director inspected the factory and gave an opinion that a minimum of 75% of defect free saleable products is expected in the factory. (iii) The defective goods were shown to be sold at the same price or prices higher than the prices of good quality goods. The Expert on the other hand gave an opinion that the price of defective goods should be....
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....e liable to confiscation. It is argued that the Appellants have not dealt with excisable goods and hence Rule 25 cannot be invoked against them. (iii) The specific clause under the rule under which penalty is imposed is not quoted and hence the penalty is not sustainable (iv) When the goods were sold at price equal to higher than the price of normal goods there is no incentive to the Appellant in changing the description of goods as defective goods. When defective goods were sold at prices equal to higher than the prices of normal goods there is no loss to revenue. (v) Since payments for all transactions are received through banking channels the allegation regarding clandestine sales ....
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....rovisions of Rule 25 are applicable against the Appellant. So prima facie we do not find any merit in the argument of the Appellant. So we direct the appellant firm namely M/s. Aggarwal Steel Rolling Mills & Metal Industries to deposit within six weeks of receipt of this order, 50% of the penalty imposed on the Appellant for admission of the appeal. Subject to deposit of this amount there shall be waiver of the balance amounts due for admission of the appeal of the firm and the appeal filed by its partner M/s. Sanjay Gupta and there shall be stay on collection of such balance amount during the pendency of the appeal. (III) Stay Application No. E-2911/2010 in Appeal No. E-3128/2010 10. These cause papers are filed by M/s. Reena Is....
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....596 Grand Total 858,685 18552639 2226317 44528 2270845 12. The facts constituting offence are the same as dealt with in Appeal No.E-3370 of 2010 filed by M/s. Aggarwal Steel Rolling Mills & Metal Industries. The main defense is that Rule 25 of Central Excise Rules under which penalty is imposed is not applicable to a dealer because they have not dealt with any goods but only dealt with invoices as per the allegation in the SCN. 13. The question whether any penalty can be imposed under provisions of Rule 25 of Central Excise Rules, 2002, on a dealer who just received fake invoices, took fraudulent Cenvat credit and issued fake invoices to pass on such fraudulent credit to others is debatabl....