2018 (10) TMI 944

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....redit on inputs received for manufacture of their final product. On the basis of intelligence the appellant/asssessee were indulging in the procurement of higher valued re-rollable scrap from the different dealers of Mandi Gobindgarh for availing cenvat credit and were diverting the same in open marker without issuance of any Central Excise invoice and were substituting the same with the kabari scrap for maintaining the inventory of stocks of raw material for the manufacturing of non alloy steel ingots, therefore, the factory of the appellant/assessee was visited on 09.08.2005 and certain records were resumed, statements were also recorded from various persons of the appellant/assessee. On the scrutiny of records, it was also observed that ....

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....ontention that it is not the case of the Revenue that the re-rollable scrap was not received in their factory as alleged in the show cause notice, in fact it has been categorically mentioned in the show cause notice that the appellants/assessee were substituting the re-rollable scrap with kabari scrap for maintaining the inventory of stock of the raw material for the manufacturing of the non alloy steel ingots. He also submits that the Revenue has not produced any evidence that how the re-rollable scrap was diverted and how the kabari scrap was procured. It is his submissions that the Revenue is heavily relying on the vehicle nos. Which were found to be fake. In this context, it is his submissions that as per the Revenue, the appellant has ....

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....e facts of the case are contrary to the allegation made in the show cause notice as it is alleged in the show cause notice that the appellant/assessee has substituted the re-rollable scrap with kabari scrap which means the re-rollable scrap was reached to the factory of the appellant and thereafter, the same was substituted with kabari scrap to maintain their statutory records. On the other hand, the Revenue is alleging that the vehicles involved in transportation of the said re-rollable scrap are not capable of transportation of re-rollable scrap to the factory of the appellant/assessee. The two allegations of the Revenue itself are contrary to each other which shows that proper investigation was not conducted to establish the fact whether....