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2018 (3) TMI 249 - AT - Central ExciseCENVAT credit - inputs - MS scrap which was purchased/received from Simandhar Steel Movers (India) Private Ltd, a first stage dealer at Mumbai - whether under the facts and circumstances the Commissioner of Central excise is justified in holding that the proposed demand as per the SCN is not sustainable on merit under section 11 A(1) of the Act and accordingly have rightly dropped the charges in the SCN? Held that: - the respondents have discharged the onus on them in terms of rule 7(2) of CCR 2002, which provides that the manufacturer or producer taking Cenvat credit on inputs or capital goods received by him shall be deemed to have taken reasonable steps if he satisfy themselves about the identity and address of the manufacturer or supplier, as the case may be, issuing the documents specified in Rule 7, evidencing the payment of excise duty or the additional duty of customs, as the case may be, either from his personal knowledge or on the strength of a certificate issued by person with whom he is familiar or on the strength of the certificate issued by the Range Supdt. of the factory of the manufacturer or supplier. We find that there is no allegation in the show cause notice that the appellant did not knew the supplier Simandhar and/or its proper address. Even in a situation where explanation to Rule 9(3) is not attracted it would be open to an assessee to establish independently within the meaning of the substantive part of Rule 9(3) that he had in fact taken reasonable steps - the respondents had purchased the goods for the price, which included the duty element, and the same was paid by cheque. Further there is no allegation that the respondents have sourced raw material in dispute, from some other source. We also find that under the scheme of the Act and the Rules, it would be impractical to require the assessee to go behind the records maintained by the first stage dealers. The respondent under the fact of this case were found to have duly acted with all diligence in their dealings with the first stage dealers Simandhar. The SCN are presumptive and not maintainable - appeal dismissed - decided against Revenue.
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