CCE Vs. KISCO CASTINGS

JUDGEMENT

(1.) HEARD the learned Departmental Representative for the appellant and learned advocate for the respondents. This appeal arises from the order dated 19th September, 2007 passed by the Commissioner (Appeals), Chandigarh. By the impugned order, the appeal filed by the respondents against the order of the adjudicating authority has been allowed and the demand made against the respondents has been dropped. The Assistant Commissioner by his order dated 13th June, 2007 had confirmed the demand of Rs. 33,429/ - along with interest against the respondents, besides imposing penalty of equal amount. Penalty of Rs. 10,000/ - was also imposed against M/s Shiv Shankar Iron & Steel Trading Company, G.T. Road, Mandigobindgarh. The said order was passed on adjudication of the show cause notice dated 09th March, 2006.

(2.) THE respondents herein are engaged in the manufacture of Non -Alloy Steel Ingots falling under Chapter 72 of the Central Excise Tariff Act, 1985 and have been availing facility of cenvat credit. M/s Shiv Shankar Iron & Steel Trading Company, Mandigobindgarh, who are also the holder of Central Excise Registration Certificate of Registered Dealer for dealing in excisable goods, were passing on cenvat credit to the respondents of the excisable goods. The said dealer was importing the scrap through CFS, Ludhiana, and availing benefit of customs duty in terms of dated 01st March, 2001. The availment of benefit of customs duty under the said Notification was subject to fulfilment of certain conditions which included the condition that the imported goods were required to be used for the purpose specified. In case of goods supplied to the respondents on which credit was passed were for melting, as the goods so supplied formed raw material for the production of the final product manufactured by the respondents.

(3.) WHILE assailing the impugned order, the learned DR submitted that, the respondents had failed to produce any evidence regarding actual transportation of the scrap under the invoices stated to have been issued by the dealer to the respondents. On the other hand, investigation established that the invoices disclose fake vehicle numbers and this was verified through the concerned DTO/RTA, and considering the numbers which were disclosed in the invoices, it was apparent that the vehicles bearing said numbers were not in a position to carry the load of scrap disclosed from the invoices from the dealers' premises to that of the respondents. According to the learned DR, the Commissioner (Appeals) totally ignored this aspect and allowed the appeal merely on assumptions and presumptions without properly analyzing the materials on record. He further submitted that, the Commissioner (Appeals) erred in relying upon the decision of the Tribunal in the matter of CCE, Chandigarh v. Neepaz Steels (India) reported in, 2007 (213) ELT 100 ignoring the decision of the Tribunal in the matter of Ranjeev Alloys Ltd. v. CCE, Chandigarh reported in, 2009 (236) ELT 124. He further submitted that, the challenge to the decision in Ranjeev Alloys Ltd.'s case (supra) by the assessee was rejected by the Punjab & Haryana High Court vide its order dated 18th August, 2009. He also submitted that, no much credence could have been given to the end use certificate stated to have been produced by the respondents as such a certificate is issued merely on the basis of the records submitted by the assessee and not on physical verification of actual use of the product. According to the learned DR, the end use certificate in question dated 22nd March, 2002 related to the product which was stated to have been utilized for the manufacture of the final product in the month of July, 2001 and, therefore, it is apparent that physical verification of actual use of the product was impossible. He further submitted that, the case clearly involves element of fraud played by the respondents and, therefore, penalty is warranted and justified.