SUGUNA MACHINE WORKS Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) THE relevant facts of the case, in brief, as per record are that the appellants are engaged in the manufacture of cast articles of irons, Motor Vehicle Parts and Parts of Escalator wheels falling under Headings 7325 00 00, 8708 00 00 and 8431 00 00 of the CETA, 1985. The appellant received the inputs namely MS scrap from the registered dealers and availed Cenvat credit under Cenvat Credit Rules, 2004. A show cause notice was issued proposing to deny the Cenvat credit of Rs. 58,940/ - availed during the month of July - August, 2006 on the basis of the invoices issued by the dealers M/s. Leadsman Enterprises. The adjudicating authority confirmed the demand of duty of Rs. 58,940/ - along with interest and penalty of Rs. 15,000/ - under Rule 15(1) of Cenvat Credit Rules, 2004 and Rule 15(2) of the said Rules read with Section 11AC of the Central Excise Act separately. Further, penalties were imposed on the first and second stage dealers.

(2.) THE assessee filed appeal before Commissioner (Appeals) for setting aside the adjudication order. Revenue also filed appeal before the Commissioner (Appeals) for imposition of mandatory penalty. By the impugned order, the Commissioner (Appeals) disposed both the appeals and upheld the demand of duty along with interest and also enhanced the penalty equal to amount of duty under Rule 15(2) of the said Rules r/w Section 11AC of the Central Excise Act. The penalty of Rs. 15,000/ - imposed under Rule 15(1) of the Cenvat Credit Rules, 2004 was set aside. Hence, the assessee/appellant filed this appeal.

(3.) ON the other hand, the learned AR on behalf of the Revenue submits that during the investigation, it was found that the dealers supplied the scrap from the local market which is not duty paid. It is further submitted that they have received the goods on much lower value than the purchase price of the dealer. Thus, it is clearly evident that the appellant had connived with the dealers in respect of receipt of the goods fraudulently. He relied upon the decision of the Tribunal in the case of Amex Alloys Pvt. Ltd. & Ors. v. CCE - : 2013 (296) E.L.T. 229 and V.K. Enterprises v. CCE -, 2010 (249) E.L.T. 462.