2018 (8) TMI 609

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....th sides and perused the records. 2. The facts in brief, after filtering out unnecessary details, are that the assessee is a manufacturer of Thermo Mechanically Treated Bars (TMT Bars). Firstly, they converted steel scrap or pig iron or sponge iron into ingots. They also converted MS ingots into TMT bars. Officers of the Central Excise received intelligence that the assessee has been misusing CENVAT credit on inputs and conducted detailed investigation. After conducting detailed investigation, they found that the data as revealed in the balance sheets for years 2004-05, 2006-07 and as derived from their firm registry for the period 2007-08 had shown excess process loss. Thus, it was felt that abnormal high process loss or invisible loss ....

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.... per this agreement, the total loss for conversion of billets into TMT bars is 5% which can be taken as a benchmark for determining the possible losses. In his statement dated 31.12.2008, Shri Anil Kedia, Managing Director of the company explained that the SAIL goods were processed separately but there is no separate account for either raw material or finished goods relating to SAIL. He explained that the loss of 5% is as per the agreement with SAIL but the actual loss occurred in the goods is higher. Therefore they have to deliver the goods as per the contract even if they received less production or incur more burning loss. The remaining material is compensated out of their production. Thus, he argued that 5% loss recorded in the SAIL agr....

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....hority. The loss of 5% in the SAIL agreement is not accurate and in fact the loss even in the goods manufactured for SAIL were much higher and therefore, they had subsequently given up the job work for SAIL as it has become unsustainable. Learned Commissioner shifted the responsibility on the appellant to explain the burning loss. This loss has been recorded in the balance sheets. The finding of the Learned Commissioner that either the inputs were not received in the factory or the inputs were cleared as such clandestinely, has no basis. No irregularities were noticed during the panchnama. (2) Regarding the non-receipt of inputs from M/s Lakshmi Gayatri Iron and Steel Ltd, on the ground that those vehicles were not transport vehicl....

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....nds. Pvt Ltd [2014 (309) ELT 577 (Tri.-Delhi)] in which it is held that regarding CENVAT credit availed wrongly against bogus invoices, once initial burden has been discharged by the department showing registration number of vehicle mentioned in invoice that of two-wheeler not capable of transporting goods, onus shifts on manufacturer to produce evidence of physical receipt of goods. 8. We have examined the arguments on both sides. The two issues to be decided are (1) Whether a demand can be raised seeking reversal of CENVAT credit on the ground that the inputs could not have been used in manufacture of final products because the losses were much higher as per the standard industry norms. (2) Whether the assessee is ent....

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....alue of the inputs and average rates of duty. In our considered view, such demand based on mathematical calculation is not supported by law. 10. As far as the second issue of the CENVAT Credit on inputs which are supposed to have been received in vehicles which turnout to be autos and cars are concerned, it is evident that it is impossible to carry inputs weighing in tonnes in these vehicles. If the assessee asserts that they had, in fact, received the goods in these vehicles, it is for them to show how. It is a well established principle that 'he who asserts must prove'. This is especially true when one claims an evident impossibility to be a fact. As far as the department is concerned, they have discharged their responsibility by showi....