AI Drafter 
TaxTMI 
TaxTMI 
2017 (3) TMI 1210
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.... Cenvat credit of duty paid on inputs, capital goods and input services. The Central Excise officers conducted audit of the accounts of the appellant and thereafter proceedings were initiated based on the findings of the audit officers. The allegation against the appellant is that they had wrongly taken Cenvat credit on Concast blooms, structural cobbles and rail cuttings which were never used in the manufacture of final products. On conclusion of the adjudication, the Original Authority disallowed Cenvat credit of Rs. 1,15,16,118/-, as wrongly availed by the appellant. He imposed equal amount of penalty on the appellant under Rule 15 of Cenvat Credit Rules, 2004 readwith Section 11AC of the Central Excise Act, 1944. The main grounds of den....
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....here is no evidence of non-receipt of the raw material or diversions of credit availed raw material. No verification of the process undertaken by the appellant and the method adopted by them to cut these raw materials into pieces and use them in the process have been conducted by the officers. No verification with supplier of raw material or transporter has been done. Admittedly, the appellants manufactured and cleared dutiable final products. If the credit taken inputs were diverted without usage, the Revenue has to bring out by investigation how such manufacture of final product was possible. In other words, there is no allegation or evidence to the effect that the appellants substituted the inputs/raw materials in their manufacture. The ....
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....ference made in the impugned order have been contested by the appellant. A summary of pointwise submission is reproduced below, for better appreciation S. No. Finding in Impugned Order Submissions of Appellant 1. Looking at the low yield of 80%, it can be safely concluded that the goods have not been taken into use for manufacture of MS Ingots The actual yield is 83.99% in 2006-07, 84.07% in 2007-08, and 84.32% in 2008-09, as is evident from the figures submitted in Reply to Show Cause Notice. There is absolutely no evidence produced in this regard in the impugned order. The finding is based on assumption and presumption. 2. The appellant has failed to follow proper procedure for maintaining accounts for raw material....
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.... The comparison made by the department with other units situated in Raipur is not justifiable, because rate of gasses is Rs. 5.25 to Rs. 5.5/- per cum high in Raigarh in comparison to Raipur. Consumption of gasses is different from one unit to another. Copy of additional submission regarding consumption of gases and invoices of gases are enclosed. 6. These items, by itself are mild steel products which can be used directly for re-rolling after slicing or cutting into required sizes. In order to consume these items in the Induction furnaces for melting, owing to the physical dimensions of such concasted products, it has to be sliced into several small pieces with the help of gas cutting equipment before being charged into furnace. And ....
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....s there is no such allegation in the SCN. Further, finding is entirely based on presumptions. 9. Finding regarding nonsubmission of consignment notes. It is submitted that the Learned Commissioner failed to appreciate that Appellant paid service tax on transportation of inputs in dispute. Further, proper ST returns were filed. Even if, there was default of nonissuance of consignment note, that cannot be attributed note, that cannot be attributed to the Appellant. 10. The finding that Appellant used inputs which were priced higher than low price of inputs available in the market. There is absolutely no evidence/enquiry placed by the Department to make this assertion. Therefore, demand on assumption and presumption.  ....
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....y the audit officers, the appellants sought to demonstrate the usage of the duty paid inputs in their furnace. 6. Regarding the yield being on the lower side, we note that a verification has been conducted by the Income Tax Department to find out the burning loss in another similarly situated unit. It was recorded that the yield varies from 82.87% to 85.21%. We also find that the impugned order made observation regarding impossibility of selling MS Ingots on loss, if the disputed raw materials were actually used in the manufacture. In this connection, we observed that, in 2005-2006 the appellant incurred a loss of about 1.22 crores and in 2006-2007 they got a profit of Rs. 30 lakhs. Further, it is not for the Revenue to determine on what....