TaxTMI 
TaxTMI 
2025 (12) TMI 364
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.... 1"). Appellant-1 had been availing CENVAT credit on raw materials procured for manufacture of its final products and was also operating as a registered trade dealer from the same premises under a different door number, (hereinafter referred to as "Appellant 2"). M/s. Ganesh Ventures, (hereinafter referred to as "Appellant 3"), is a registered trader operating from a different location. All the three units belong to the same group, and therefore share a common business interest. 3. It appears that in 2006, Appellant 1 imported iron and steel melting scrap for use in manufacture. Whenever the material was not required for manufacturing, Appellant 1 transferred the imported scrap to Appellant 2, located within the same premises but under a different door number, by endorsing all 15 Bills of Entry during the period May 2006 to May 2007 for trading purposes. Appellant 2, subsequently transferred the material to Appellant 3 by issuing 87 invoices during May 2008 to November 2008. Appellant 3, in turn, issued another set of 87 invoices and transferred the scrap back to Appellant 1 up to November 2008, covering a quantity of 1355.845 MT and duty components of Rs.31,55,670/- (CVD) Rs.74....
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....ted melting scrap to Appellant 2 for trading purposes by endorsing the Bills of Entry, under the bona fide belief that issuance of a separate invoice was not required. ii. The duty-paying documents were issued in the name of Appellant 1, and the receipt of goods by Appellant 2 has not been disputed. Appellants 1 and 2. therefore, treated the endorsed Bills of Entry as valid documents. On this basis, Appellant 2 sold the goods to Appellant 3 by issuing invoices in its favor, and Appellant 3, in turn, sold the same goods back to Appellant 1 under invoices on which CENVAT credit could be claimed, on the strength of which Appellant 1 availed CENVAT credit. There is no dispute regarding the receipt of goods by Appellant 1; the sole objection raised by the Department is that the goods were originally imported by Appellant 1 in its capacity as a manufacturer and, therefore, could not have been transferred merely by endorsement on the Bills of Entry. iii. That the issue in question had been decided in the Appellants favor in the case of Union of India Vs. Marmagoa Steel Ltd. reported in 2008 (229) ELT 481 (SC). The Appellants further relied upon several judicial precedent....
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....04. Proper records were maintained by the Appellants and were filed before the proper authorities. He submits that when the fact that the imported scrap was duty paid, the Appellants are entitled to avail credit on the same and denial of credit is not correct. In view of the above, the learned counsel prayed that the impugned orders may be set aside. 11. The Ld. Authorized Representative Mr. M. Selvakumar representing the Department reiterated the findings of the lower Adjudicating Authorities. He has argued that the Appellants are not eligible for credit of the duty paid on "Melting scrap" in dispute which was originally imported by Appellant 1 in view of clear violation of Rule 9(1)/Rule 4 of Cenvat Credit Rules by supporting the findings of the lower authorities. 12. Heard both sides and considered the submissions made in the grounds of appeal and also during the course of hearing before the Tribunal. 13. As seen from the impugned Order-in-Appeal, the Department's case is that not only the Bills of Entry-under which the goods were originally imported were improperly endorsed for the purpose of availing credit, but also that Appellant 2 and Appellant 3, being dealers....
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....this case, the Appellant was a manufacturer of re-rollable materials viz. T.M.T bars which are their final products during the material period. The raw materials for such final products are ingots and billets. But what was imported and endorsed was melting scrap which are raw materials for the manufacture of ingots/billets and not for T.M.T. bars. For the production of ingots/billets one should have an induction furnace. The assessee herein did not have an induction furnace in the year 2006 and hence they were not in a position to produce ingots/billets at that point of time. Hence they are not entitled to take credit of duty paid on the melting scrap which was not their input. In so far as the melting scrap is concerned, they were merely acting as traders in a factory premises which is again impermissible. Rule 9 does not permit/authorize endorsement of a bill of entry for receiving materials by a registered dealer. 16. It was also observed therein that the first stage dealer is required to purchase the goods under cover of invoice from a manufacturer or from an importer. I find that the Lower Adjudicating Authority has discussed all the issues raised by the Appellant. It is no....
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....ightly denied and proposed to recover under Rule 14 of Cenvat Credit Rules, 2004 read with proviso to section 11A(1) of Central Excise Act, 1944. I also hold that M/s. SGSRML 14A is liable to be penalized under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944. 35. M/s. SGSRML 14B has not purchased the imported scrap. They have purported to have received the scrap only under endorsed bills of entry and not under the cover of an Invoice as stipulated under Rule 9 of Cenvat Credit Rule, 2004. Admittedly the impugned goods were not received physically by the dealer. Both transactions relating to the receipt and issue were made only on paper. The dealer and the manufacturer being the same person, they knew about the invalid nature of transactions from the very beginning. In fact they are the authors who had masterminded the entire episode. It can be seen from the statement of Shri.M.Kesavalu, Supervisor, SGSRML 14A who is also the authorized signatory of M/s. SGSRML 14A and M/s. SGSRML 14B that the goods imported were sold to M/s. SGV in 2008-09 i.e from May 2008. Inasmuch as the offence committed by them was after 1.3.2008, the date fr....
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....f the provisions of CENVAT Credit Rules, 2004, making the appellant ineligible to avail of credit. It is also not clear how CENVAT credit has been availed or transferred without receipt of the goods involved physically. Further, I failed to understand the motive behind import of the scrap which is not an input at that relevant time and to stock it in its own dealer's premises and then transfer to the other dealer who is related to them and also further retransfers to the appellant's main unit for its usage. All these transactions availing credit and transferring the same have been carried out without receipt or dispatch of the goods. There is no sale or purchase. 18. It is seen that, in the decision of the Hon'ble Supreme Court in Union of India v. Marmagoa Steel Ltd., reported in 2008 TIOL 249 (SC) (CX), it was held that CENVAT credit is admissible on imported consignments even if the Bill of Entry is directly transferred by the importer to another unit of the assessee, without the goods ever being received by the importer's manufacturing unit. The Court held that so long as duty has been paid at the time of importation, and the transfer of goods under the endorsed Bill....