TMI Blog2005 (7) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... f the credit on invoices issued by such dealers. They had received the scrap classified as 'M.S. Offcuts of M.S. Sheets'. Same we sorted out, thereafter sent as M.S. Scrap . Mere change of nomenclature, will not call for denial of credit. This Tribunal in the case of Singh Scrap Processors Ltd. v. CCE, Mumbai [ 2002 (4) TMI 114 - CEGAT, MUMBAI] had held that removal of impurities in the scrap purchased compressing with aid of mechanical press to form billets would amount to manufacture. If the dealers activities, amounted to manufacture, as per this decision then the dealers should have been brought under the Excise net for the activity of segregation bundle billet formation. The denial of the credit on the dealers invoices, for the reason, as arrived, cannot be upheld when no efforts are made to bring this activity of the dealers under excisable manufacture. If the dealer status is not questioned, then the dealers need not maintain the records of inputs for which they have not issued Modvatable invoice, as in the case herein the facts revealed. There is nothing incriminating in sale of goods prices at higher value no Modvat invoice issued. We therefore find no reason to ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Dealers availed Modvat credit/Cenvat credit on Cold Rolled Cold Annealed Scrap (CRCA Scrap for short) even though the invoice sent showed the same as off cuts M.S. Sheets, M.S. Trimming etc. 1.2 Notice was also issued to the Sr. Vice-President, Sr. Material Manager of assessee-appellant in E/2718/04, M/s. National Steel Traders, M/s. M.H. Corporation, M/s. Mehta Trading Corporation, M/s. Kohinoor Trading Corporation, dealers/second stage dealers who had supplied the said scrap as impugned in this case. 1.3 Since no charges were found to be framed on Sr. Vice-President the Sr. Material Manager for invoking penalty under Rule 209A. No orders were passed on them. 1.4 Penalty of Rs. 2 lakhs each was imposed on - (i) M/s. M.H. Corporation, Mumbai M/s. Kohinoor Trading Corporation of Mumbai being first stage dealers. (ii) M/s. Mehta Trading Corporation, Mumbai, M/s. National Steel Traders Mumbai being second stage dealers. Under Rule 209A of Central Excise Rules, 1944 read with Rule 26 of Central Excise (No. 2) Rules, 2001. 1.5 Assessee, (M/s. BCL for short) was demanded Rs. 1,05,18,891/- after denying the credit on the invoices of M/s. Mehta Trading Corporation M/s. National Steel Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining scrap at lower prices was sold than the purchase price at which it was procured from manufacturers where scrap arose to M/s. Mehta Trading Corporation M.S. Scrap cutting off cuts etc. may not be the goods received as described in the invoices, small portion of original material in the receipts will not entitle credit. (iii) The assessee was aware of the quality of scrap being different from that sold by original manufacturer to first stage dealer, yet they obtained the documents and availed the credit. 2.2 We find the scheme of Modvat credit and its successor scheme i.e. Cenvat credit scheme provide that the duty paid on an input can be availed as credit, provided the inputs viz scrap is received in the factory of the availer. M/s. BCL, the assessee herein has received and used the quantities. The credit can be availed, of such duty paid inputs received even if on the commercial basis of sales effected or otherwise, from the suppliers dealers. Two stages of dealers are permitted and transfer enter such dealers, before a credit availer receives the inputs is permissible. The amounts paid, as price, to such dealers, who have to be registered under the scheme, and maintain reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial in the notice or and the findings. No material is shown to us to came to a conclusion of CRCA Scrap not to be 'offcuts of sheets'. We, therefore, find no reason to arrive at and ascribe great significance to the Modvat documents to be showing the description 'off cut M.S. Sheet scrap' while the bundled scrap consists of CRCA sheet scrap as is being made out in these proceedings. There is no material on record to indicate that offcuts are differently valued than CRCA sheet scrap per unit. In fact the charge are of higher values for CRCA scrap that M.S. Sheet offcut scrap is the case of Revenue. When duty has been paid on a lesser value then remedy is not to deny the benefit of credit of actual duty paid but was to alert the manufacturers jurisdictional officers to start proceedings to enhance the scrap values. Credit cannot be denied as availed. The alternate submission of M/s. Bajaj Auto Scrap classification being in doubt also would go to explain the difference no men clause. 2.4 There is a finding of segregation by scrap being conducted at first dealers premises of the scrap received from the original equipment manufacturers like Bajaj Auto etc. Thereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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