2018 (1) TMI 716

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....y are engaged in the manufacture of Aluminum Alloy Ingots. The main raw material are Aluminum Scrap, Silicon and other chemicals. Aluminum scrap is procured by the main appellant indigenously as well as through the imports. The indigenous scrap were either with cenvatable invoices or from dealers without cenvat credit facilities. The appellants availed cenvat credit of CVD paid on imported scrap and excise duty paid on indigenous scrap, which are covered by the cenvatable invoices. On completion of audit verification of the records maintained by the main appellant, the Revenue entertained a view that the appellants cleared the imported scrap as such in the guise of miscellaneous scrap purported to have been produced by them during the cours....

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.... of duty. They also produced 5,03,248 kgs. of misc. scrap, which was also cleared on payment of duty. The Original Authority did not appreciate the fact that the landed cost of imported scrap was around Rs. 150 per kg. and they are selling their misc. scrap generated during the manufacture at Rs. 15 per kg. The Revenue could not satisfactorily explain as to how the appellant could manufacture 61,09,085 kgs. of Aluminium ingots without the use of imported scrap. In fact, comparatively they have used much less quantity of cenvatable scrap to the extent of 1,07,285 kgs. Ld. Counsel further submitted that all the three scrap were mixed and fed into furnace. After the production of ingots, misc. scrap of various other metals left remanant were c....

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....both the sides and perused the appeal records. 6. On the first issue, we note that the impugned order heavily relied on by the description of imported Aluminium scrap. As these scrap were cleared as tense scrap, and as per ISRI standard, these are not to contain any iron, brass or non-metallic items. A case was made against the appellant that generation of misc. scrap by the appellant during the course of manufacture of Aluminium ingots is not tenable. We note that the Original Authority has erred in appreciating the facts of the case. It is clear that the appellant used scrap from three different sources. During the year 2011-2012, they have used a total quantity of 70,01,115 kgs. of scrap. About 80% of the said scrap is through imports o....