TaxTMI 
TaxTMI 
2005 (7) TMI 9
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....der 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. (ii)....
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....bsp; M/s. Mehta Trading Corporation, Mumbai, M/s. National Steel Traders Mumbai being second 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 dis....
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....he adjudicator, of the scrap being procured in loose form is then being converted into bundles/bales & thereafter sent to M/s. BCL. The difference in commercial invoice description & the 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 ....
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....ginal duty discharged by a manufacturer under the Central Excise Act, 1944 cannot be varied and has to be allowed to be taken as credit irrespective of actual price tendered to the suppliers/sellers especially the dealers. Therefore, the entire attempt to find a red herring in the actual amounts, paid for the "scrap", 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 a....
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....dings. No material is shown to us to came to a conclusion of "CRCA Scrap" not to be 'offcuts of sheets'. We, therefore, find no reason to arrive at and ascribe great significance to the Modvat documents to be showing the description 'off cut M.S. Sheet scrap' while the bundled scrap consists of "CRCA sheet scrap" as 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....
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.... & the assessee. The perusal of the statement of Shri Abdul H. Khan of Kohinoor Trading Company dated 30-7-2001 indicates no press bundling but only hand bundling to have been done, as well as it indicates they buy A-grade scrap at Tender price from M/s. Bajaj; thereafter they sort out good pieces & sell on Modvat credit 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 Pr....