CCE Vs. STEEL SALES CORPN.

JUDGEMENT

(1.) THE Revenue is in appeal in this case against the Order -in -appeal dated 15.12.2003 wherein the appellate authority has set aside the penalty on the respondents.

(2.) THE relevant facts for my consideration are : the respondents are a dealer and purchased M.S. Scrap from one M/s Mahabir Prasad and Co. The respondents in turn sold the said scrap to its purchasers and issued a dealer's invoice. The Department issued a Show Cause Notice to the respondents on the ground that the scrap purchased by them from the said M/s Mahabir Prasad and Co. was not an industrial scrap, but a scrap from Kabari, and hence the respondents have made themselves liable for imposition of penalty under Rule 209 of Central Excise Rules, 1944. On adjudication, the adjudicating authority imposed a penalty of Rs. 1,34,000/ - on the respondents. Aggrieved with this order, the respondents preferred an appeal before the Commissioner (Appeals) who after considering the facts and circumstances of the case, held in their favour that, penalty imposed on the respondents is only on assumptions and presumptions, and hence set aside the penalty and allowed the appeal of the respondents. The Revenue, being aggrieved with this order, is before lite Tribunal.

(3.) THE learned DR submits that imposition of penalty under Rule 209 on the respondents is correct inasmuch as they were aware that they are receiving the scrap, which is purchased from the market. Since the scrap purchased from the market is ineligible input, passing of such credit for ineligible input would fall under the provisions of Rule 209(bbb) of the Central Excise Rules. She relies upon the investigation conducted on the M/s Mahabir Prasad and Co.'s factory where statements were recorded in which it has been submitted that they have not cleared the goods as mentioned in the invoices to some parties.