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2015 (8) TMI 802 - AT - Central ExciseDenial of CENVAT Credit - Capital goods - Imposition of penalty - Held that:- Assessee availed credit on the basis of invoices showing the description of material MS Round, M.S. Wire, M.S. Wire coils etc. received from the registered dealers. The rate of duty is higher than M.S. scrap. On investigation, it was found that the dealers supplied non-duty paid scrap procured from the market and issued invoices of M.S. Rounds, M.S. Wire etc. to the Applicant No.1 in order to claim cenvat credit under Cenvat Credit Rules, 2004. It is well known that M.S. Rounds, M.S. wire etc. are virgin material which cannot be used as scrap in the furnace. - 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. - Partial stay granted.
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