KWALITY FOUNDRY INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) These appeals are arising out of common order and, therefore, both are being taken up together for disposal.

(2.) The relevant facts of the case, in brief, are that the appellants are engaged in the manufacture of pipes and pipe fittings, ingots, moulds, etc. classifiable under Chapter Heading No. 73 and 84 of the Schedule to the Central Excise Tariff Act, 1985. The appellants availed credit of Rs. 99,560/ - and Rs. 94,441/ - on the inputs against the invoices issued by the registered dealers viz. M/s. Maheshwari Udyog, Visakhapatnam and Shri Balaji Iron & Steel Traders, Visakhapatnam respectively. It has been alleged that the registered dealers did not purchase the goods from the manufacturer M/s. Rashtriya Ispat Nigam Ltd. directly and, therefore, the appellants are not eligible to take credit on the basis of documents issued by the registered dealers. The Original Authority disallowed the Modvat credit and imposed penalty. The Commissioner (Appeals) upheld the Adjudication Order.

(3.) Ld . DR on behalf of the Revenue reiterates the findings of the Commissioner (Appeals). He submits that Rule 2(f) of Cenvat Credit Rules 2002 defined "first stage dealers" means a dealer who purchases the goods directly from the manufacturer. He further submits that in the present case, the registered dealer did not purchase the goods directly. He also submits that in this case M/s. A.S. Steel Products purchased the goods and they were not registered with the Central Excise Authorities. So, the invoices issued by the registered dealers are not a valid duty paying documents.