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2011 (5) TMI 599 - CESTAT, AHMEDABADClandestine removal - Search and seizure - Confiscation - M/s. Jaidev Alloys Pvt. Limited has availed the cenvat credit in respect of the ship breaking plates but have diverted the same to their other two re-rolling mills - obtaining low cost scrap from the open market from unorganised sources and have used the same in the manufacture of MS Ingots - Held that:- There is no evidence locating any supplier or transporter of such a huge material. The assessees have accounted for all the raw materials in their statutory records and have shown the production of MS Ingots from the same. No evidence worth mentioning stands produced by the Revenue to rebut the entries made in the statutory records. Even at the time of drawing Panchnama in the factory of M/s. Jaidev Alloys Pvt. Limited, ship breaking scrap was found in their premises. The presence of the said scrap derails the entire case of the Revenue that such scrap can never be used in the manufacture of MS Ingots. Shri J.C. Patel appearing for the respondents have clarified that Shri Vijay Garg in his statement has specifically clarified, in answer to questions put to him that plates obtained by ship breaking can be used for melting purposes. He has further clarified that all the plates are of not good quality and it is only where the plates are of lower value that the same are used for melting purposes, whereas the plates supplied to re-rolling mills are of higher value. In the absence of any alternative source of procurement of raw materials, no reason to upset the findings of the adjudicating authority that presumptions cannot be made the base for making a charge of diversion of huge quantity of raw material for continuous period of four years and substituting the same with market scrap. After all M/s. Jaidev Alloys Pvt. Limited were paying duty on their final products and Revenue has not been able to show as to how such huge quantity of final quantity of final product were being manufactured by them, if the scrap shown to have been received by them, was not actually received and there was no other alternative source of procurement - Decided in favour of the assessee
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