Case Law Details
C.C.E. & S.T.-Bhavnagar Vs Arsh Alloys (CESTAT Ahmedabad)
CESTAT Ahmedabad held that no reliance can be placed on statements of third party without tangible corroborative evidence. Accordingly, recovery of Cenvat Credit under rule 14 rightly dropped.
Facts- The respondent-assessee is engaged in manufacture of excisable goods namely “M.S. ingots” in their Induction furnace unit. For the purposes of manufacture of the said goods, the Respondent mainly purchased duty paid inputs such as “waste and scrap of iron and steel”. The Respondent availed cenvat credit of duty paid on the inputs received and used in their factory of production. During the period April 2007 to August 2010, the Respondent purchased waste and scrap of iron and steel from various ship-breaking units who cleared the same ex-factory (ship-breaking yards) on payment of applicable central excise duty.
On 21-8-2010, the officers of department carried out search at premises of Respondent, acting upon intelligence that these units are engaged in availing cenvat credit without receipt of goods physically or are diverting the goods removed under the invoices issued by the ship-breaking units to other units – mainly re-rolling mills situated in or around Bhavnagar.
Based on material and statements, it was the case of the department that Respondent fraudulently availed cenvat credit without actual receipt of waste and scrap of iron and steel from the ship-breakers with the help of various brokers and to cover up the transaction, the Respondent was procuring bazaar scrap which is non-excisable waste and scrap purchased from local traders.
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