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2014 (3) TMI 552 - CESTAT CHENNAIAvailment of CENVAT Credit - fraudulent credit - Revenue made out a case against the first applicant that the three other applicants, namely, M/s. Santhosh Kumar Steels, M. Manikandan, M/s. Sri Amman Steels supplied non-duty paid scrap under cover of invoices showing excise duty payment to enable the first applicant to take CENVAT credit - investigation showed that the dealers had obtained duty paid items like MS wires, CR coils, CR sheets etc., and they have also procured non-duty paid iron and steel scrap from the market and they issued invoices to the applicant apportioning the duty paid on such goods received but sent the non-duty paid scrap under the cover of invoices. Held that:- Prima facie, I do not see any reason as to why HR sheets, coils, wires etc., should go for melting in such large quantities. No convincing explanation has been forthcoming from the appellant for such strange practice. If such goods are scrap the normal course of events is that the manufacturer of the goods himself re-melts the goods rather than selling it to a dealer who sells it to some other manufacturer for melting. In such circumstances, there is a strong prima facie case that what was used was non-duty paid scrap and the invoices on which credit was taken related to prime materials which were sold to others. Therefore, I consider it proper to call for a pre-deposit of 50% of the duty demanded from the manufactures, namely, M/s. K.S.G. Castings & Products within six weeks from the date of the order - Conditional stay granted.
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