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2016 (11) TMI 1329 - CESTAT CHANDIGARH

2016 (11) TMI 1329 - CESTAT CHANDIGARH - TMI - Clearance of defective and rejected goods - In the ER 1 return, appellant were reflecting 98% of their production as prime quality CTD bars and rounds whereas in the commercial sale invoice, the said goods were being cleared as defective - Held that: - I find that entire case of the Revenue is based upon the financial calculation of profit and loss of the manufacturing unit. In fact, Commissioner (Appeals) has observed that circumstantial evidence p .....

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ised representative of the appellant as also of the dealer are to the effect that inputs stand supplied to them under the cover of proper cenvatable invoices. Statements of representative of the M/s ASRM is to the effect that during the relevant period lot of their product came out to be defective and rejected and as such, same was sold after discharging the central excise duty leviable thereon. Admittedly, the appellant need the raw material for the production of their final product and if, as .....

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dent, I find that the appellant is engaged in the manufacture of alloys and non-alloys steel ingots. They procured their raw material from manufacturer M/s Aggarwal Steel Rolling Mills and Metal Industries (hereinafter referred to as M/s ASRM). The raw material so purchased by the appellant was defective CTD rounds /bars which acted as a waste material for the appellant, to be melted in their furnace The goods were duly covered with the invoices issued by the manufacturer M/s ASRM was duly cover .....

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tween M/s ASRM and the registered dealer and further dealers and the appellant were covered only by the cenvatable invoices, without actually supply of the goods and M/s ASRM had diverted best goods in the open market and also has procured the raw material from an alternative source. Accordingly proceedings were i ted against the present appellant for denial of Cenvat Credit availed by them, by way of issuance of show cause notice. The said proceedings resulted in passing of an order by the orig .....

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aring for the Revenue draws my attention to reasoning adopted by the lower authorities to hold against the appellant. He submits that particular price which the CTD bars stand sold by M/s ASRM as rejected material is at par with the value of prime quality CTD bars. Further, no reasonable prudent man would use high valued goods for the purpose of melting in his furnace. 6. However, on being questioned as to whether there is any evidence showing clearance of prime quality CTD bars of M/s ASRM to a .....

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