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2013 (8) TMI 305 - AT - Central ExciseWaiver of pre-deposit - cenvat credit - duty paying documents - M/s. Praveen Foundry Pvt. Ltd. (Applicant No.1) is a manufacturer of castings of automobiles. They purchased MS scrap and SS scrap from registered dealers and used in the manufacture of castings. Original authority confirmed the demand of duty and imposed penalty of equal amount along with interest on the ground that they received MS scrap but the duty paying documents were showing the goods as MS channels and angles, rods, rounds etc – Held that:- Applicant No.2, Shri A. Radhakrishnan, M.D. of Applicant No.1 company in his statement dated 24.9.2008 categorically stated the details regarding process of receiving M.S. scrap, Lab test, storage and use in the manufacturing of finished goods. In the context of the present case, he stated that they received virgin materials and treated them as scrap. Prima facie, it is difficult to accept that a prudent business would use virgin material as scrap and such statement is contrary to the statements of dealers and this virgin materials usually cannot be used in melting scrap in the Furnace. We find that Rule 9 (5) of Cenvat Credit Rules, 2004 provides that the burden of proof regarding admissibility of the Cenvat credit shall lie upon the manufacturer taking such credit. It is apparent from the evidences, namely statements, process of manufacture etc. that the applicant received non-duty paid M.S. scrap, S.S. scrap in the guise of MS & HR plates, MS Wire coil, MS Round coils etc. from various registered dealers and availed cenvat credit, which is not permissible under Cenvat Credit Rules - Prima facie, the applicant failed to discharge the burden of proof that they received duty paid MS scrap, SS scrap on the basis of Central Excise invoices - Applicant No.1 is directed to deposit Rs.13,00,000/-(Rupees Thirteen lakhs only) within 6 weeks - Upon such deposit, predeposit balance duty along with interest and penalty on the applicant-company as well as penalty on its Managing Director (Applicant No.2) shall stand waived.
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