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2015 (6) TMI 655 - CESTAT NEW DELHI

2015 (6) TMI 655 - CESTAT NEW DELHI - 2015 (328) E.L.T. 412 (Tri. - Del.) - Denial of CENVAT Credit - Fraudulent availment of CENVAT Credit - Held that:- The sole reason to denying the CENVAT Credit is that the Revenue did not find any entry at Punjab Sales Tax Barrier but on the other hand entry at the Himachal Pradesh Sales Tax Barrier entry point is there. Therefore, the receipt of scrap has been entered into the barrier of Himachal Pradesh. Moreover, the allegation against the respondent is .....

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respondent through account of payee cheques. In the absence of any cogent evidence against the respondent, the charge of availment of fraudulent CENVAT Credit on melting scrap on the invoices issued by the dealers of Mandi Govind Garh is not sustainable.

Demand of differential duty - imported melting scrap - Held that:- certificate issued by the Range Superintended cannot be denied by any authority in the absence of any contrary evidence. Admittedly, in this case Revenue has not prod .....

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y and cannot be denied CENVAT Credit of CVD paid by them.

Clandestine removal of goods - parallel invoices - Held that:- Merely, the statement that they have received these photocopies of invoices from Excise and Tax Department of Himachal Pradesh, in the absence of any documentary evidence, the parallel invoices are no acceptable documents, therefore, we hold that the duty cannot be demanded on this fake invoices produced by the Revenue. Therefore, demand of duty against the responde .....

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otice. 2. The facts of the case are that the main respondent Shri Rama Steels Limited is located at Himachal Pradesh and is engaged in manufacture of steel ingots from melting iron and steel scrap. The scrap is procured from the dealers located in Mandi Govind Garh as well as import through ICDs situated in Punjab. Till 2000, the respondent was working under compounded levy scheme, there is no dispute. As the State of Punjab and Himachal Pradesh are involved in transactions of the respondent who .....

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at Himachal Pradesh Tax Barrier Records but no corresponding entries were found with Punjab Tax Barriers. Therefore, it was alleged that the goods were not procured from Punjab as the same has not passed through Punjab barriers to be received by the respondent and it was alleged that these consignments were originated from in Delhi, therefore, allegation is concluded that respondent has not received melting scrap and only received duty paid invoices on which they have availed inadmissible CENVAT .....

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f Punjab and bazaar Scrap was procured from Delhi. On these allegations, the CVD availed by the respondent to the tune of ₹ 36,17,694/- was sought to be denied for the period 1/4/2000 to 15/10/2001. Therefore, as these consignments have been procured from the local market, therefore, they are not eligible for concessional rate of duty on imported goods under notification nos. 23/1998 Customs dated 2/6/1998, 21/1999 Customs dated 28/2/1999, 16/2000 Customs dated 31/03/2000 and 17/2001 Custo .....

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tions, the show cause notice was issued to the main respondent and for denial of CENVAT Credit demanding differential customs duty and demanding of duty on the goods cleared on the strength of parallel invoices along with interest and imposing penalty on the main respondent and penalties on co-respondents. The Adjudicating Authority examined the matter in detail and hold that the charges alleged in the show cause notice are not sustainable, therefore, dropped the proceedings against the responde .....

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atory. Requirement of State Excise and Taxation Department under Punjab and Himachal Pradesh States and vehicles moving through invariable routes are liable to be penalized. There were no entries on the tax barriers, therefore, the allegation that the respondent has not received the goods against proper invoices is correct and the respondent have received only invoices without goods. The non-examination of dealers/truck owners cannot be the ground of dropping the proceedings when the respondent .....

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garh , reported in 2010 (261) ELT 68 (T) which was confirmed the Hon'ble Punjab and Haryana High Court reported in 2012 (281) ELT 230, (P&H) and CCE Vs. International Cylinders Pvt. Ltd. Reported in 2010 (255) ELT 68 (HP). The vehicles carrying imported scrap have not moved in the State of Himachal Pradesh as per the gate pass of ICD and no cogent evident has been produced by the respondent, therefore, conclusion drawn by the Revenue that these are bazaar scrap procured from Delhi is cor .....

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ignatory. Therefore, the charge of clandestine removal has been proved. In these circumstances, he pleaded that impugned order is to be set aside. 7. On the other hand, ld. Counsel appearing on behalf of the respondent submits that in this case, the allegation that goods have not been passed through Punjab barrier is not sustainable as the goods procured from Mandi Govind Garh were duly entered at the Sales Tax Barrier of Himachal Pradesh. The allegation of the Revenue is that this is a bazaar s .....

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the respondent. 8. With regard to the imported scrap, it is the submission of the ld. Counsel that the imported scrap was required to be utilized by the appellant as they have availed the benefit of concessional rate of duty as per notification on the condition of end user. The Range Superintendent has given the certificate that imported scrap has been used by the respondent in manufacturing their final product and these evidence cannot be ignored. Therefore, the charge that the imported scrap h .....

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on the bases of these invoices cannot be proved by the Revenue, consequently it cannot held that it is case of clandestine removal. Therefore, impugned order is to be upheld. 10. Heard both the sides and considered the submissions. 11. In this case, three issues have been raised before us. (a) Fraudulent availment of CENVAT Credit on melting scrap on the invoices received from the dealers of Mandi Govind Garh. (b) Short payment of custom duty on imported melting scrap and the availment of CVD p .....

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the barrier of Himachal Pradesh. Moreover, the allegation against the respondent is that they have procured this scrap from Delhi. If the scrap is procured from Delhi to enter into Himachal Pradesh, the same has to pass through many State Barriers but Revenue has failed to prove that respondent has procured the scrap from Delhi with cogent evidence that same has passed through various barriers particularly from the Punjab Barrier of Sales Tax. Admittedly, no statement of transporters has been re .....

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his issue and rightly dropped the demand on this account and not imposed penalties on the co-respondents. (b) Demanding of differential duty and denial of CENVAT Credit on imported melting scrap. The respondent has availed concessional rate of duty on the condition of end user and respondent had produced the certificate from the Range Superintendent certifying that the imported scrap had been used by the respondent in manufacture of their final product. The certificate issued by the Range Superi .....

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