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TMI Blog2017 (12) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Ramesh Kumar Daga. 2. The brief facts, as per the show cause notice dated 22/12/2010 are that M/s. Sanmati Steel Pvt. Ltd. was manufacturer of 'Elastic Rail Clips' (ERC for short) and they were procuring steel rounds - raw material for manufacturing of ERC. Indian railway was the sole buyer of ERC from the said M/s. Sanmati Steel Pvt. Ltd. Such ERC were manufactured as per design and drawing of Indian Railway. ERC was supposed to be manufactured from the specific raw material, that is "Silico Manganese Spring Steel Round having diameter 20.64 MM and grade 55 Si7". M/s. Rashtriya Ispat Nigam Ltd, (RINL) was one of the manufacturers of such rounds and the other manufacturer are Sunflag Iron and Steel Co. Ltd. and Upper India Steels, Lu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods -rounds as mentioned on their purchase invoices in respect of the said items. Instead of complete description/specifications they used to mention only 'rounds'. Further, since 1.4.2005 they made sale of round to M/s. Sanmati Steel Pvt. Ltd. They used to receive the purchase orders telephonically from their buyers who mention the name, size specification, grade of item being purchased. On their conformation of the availability of stock, the sales are made. On being specifically asked if from 01/04/2005, they had purchased 20.64 mm 55Si7 rounds till date, he sought some time, and thereafter on 03.5.2010 he submitted party Ledger account for the relevant period in respect of M/s. Sanmati Steel Pvt. Ltd. After perusing the record, he i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer. In the sale invoices in the freight column, "for godown" mentioned the freight is paid by them and in some mentioned 'EX Godown', freight have been paid by the buyer'. 3. Further statement of Shri Vinod Kumar Jain, Director of M/s. Sanmati Steel Pvt. Ltd. was recorded on 20/08/2010 wherein he stated after seeing a chart - RUD 13, of details of purchases made by them from M/s. Daga Trading Company and M/s. Jagdamba Steels, he agreed to the contents of the chart, that they have received cenvatable invoices mentioned in the chart without accompanying the goods shown in these invoices and used the material -rounds 56 IES 20.6 to instead of 20.64 MM SS i7. Further statement was recorded on 28/09/2010 of Shri Vinod Kumar Jain, wherein it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Rule 11 of Central Excise Rules, 2002 and as such, are liable for panel action under Rule 25 of Central Excise Rules, 2002 read with section 11 AC of the Act read with Rule 15 A of Cenvat Credit Rules, 2004. The Show cause notice was adjudicated on contest and the proposed demand of Rs. 6,21,491/- against M/s. Sanmati Steel Pvt. Ltd. was confirmed along with equal amount of penalty. Further penalty was Rs. 50,000/- was imposed on Shri Vinod Kumar Jain Director of M/s. Sanmati Steel Pvt. Ltd. and penalty on these appellants as aforementioned was imposed along with penalty of Rs.One lakh on M/s. Jagdamba Steel. 5. Being aggrieved, the appellant had filed appeals before learned Commissioner (Appeals) who vide impugned order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant have dealt with dutiable goods in any clandestine manner. Accordingly, no penalty is leviable under the provisions of Rule 26 on the M/s. Daga Trading Company or on its Director under Rule 26 of Central Excise Rules, 2002. 7. Heard the learned AR for Revenue who have supported the impugned order and also taken me through the allegations in the show cause notice. 8. Having considered the rival contentions, I find that the whole case of Revenue was made on the presumption that M/s. Sanmati Steel Pvt. Ltd. was requiring a particular grade of rounds as per requirement of its buyer - Railways. As the appellants herein have sold them rounds, which also includes some other grade of rounds, the whole transaction is presumed fictitious ..... X X X X Extracts X X X X X X X X Extracts X X X X
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