Real Ispat And Power Ltd vs Cce, Raipur

(Arising out of OIO No.Commissioner/RPR/CEX/140/2012 and OIO No.Commissioner/RPR/CEX/141/2012 dt.31.12.2012 passed by the CCE, Raipur, Chhattisgarh)

Date of Hearing: 15.05.2015

Date of Order:09/6/2015

For approval and signature:

Honble Mr.Rakesh Kumar, Member (Technical)

Honble Mrs.Sulekha Beevi C.S., Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Real Ispat and Power Ltd. Appellant

Vs

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CCE, Raipur Respondent

Present for the Appellant: Shri Alok Bhartwal, Advocate

Present for the Respondent:Shri R.K.Gupta, AR

Coram: Honble Mr.Rakesh Kumar, Member (Technical)

Honble Mrs.Sulekha Beevi C.S., Member (Judicial)

FINAL ORDER NO.51799-51800/2015

PER: RAKESH KUMAR

The facts leading to the filing these appeals are, in brief, as under:

1.1 The appellant (Formerly known as M/s.Gaurav Krishna Ispat (I) Ltd), Plot No.317-321 & 358-360, Urla Industrial Area, Raipur manufacture MS Ingots and TMT bars. The raw materials for manufacture of MS Ingots are sponge iron, steel scrap, pig iron, small quantity of calcined petroleum coke (CPC) and silico manganese. Sponge iron is also called direct reduction iron which is the principal raw material. While in the mild steel scrap, the percentage of carbon should not be more than 0.25% and there should not be any iron in the form of iron oxide (FeO), the sponge iron has some iron in form of iron oxide and also has the impurities in the form of gangue(upto 6%) and small impurities of Phosphorus and Sulphur. For manufacture of MS Ingots from the sponge iron,alongwith the sponge iron, steel scrap, pig iron, small quantity of CPC, and Silico Manganese are charged into the furnace in certain proportion. Pig iron contains 3.6% to 4% of carbon and when it is melted with sponge iron, the carbon present in the pig iron reduces the iron oxide present in the sponge iron into iron and carbon gets oxidized into CO2. The carbon in the CPC (which is 99% of carbon) also reacts with iron oxide present in sponge iron and reduces the same to iron. The carbon present in pig iron, CPC, sponge iron, iron and steel scrap and silico manganese, besides reducing the iron oxide present in sponge iron into iron also contributes to the carbon content of mild steel and the proportion of pig iron, steel scrap, CPC and silico manganese to be melted with sponge iron in the furnace has to be such that the carbon content of the resultant steel is of the desired level  0.25% in case of mild steel.

1.2 Since in the appellants unit, the payment of duty through cenvat credit was on higher side, the jurisdictional central excise officers started investigation for ascertaining the reasons for the same. The appellant during the period of dispute i.e. during period from 2006-07 to 2010-11 and January, 2011 to December, 2011 were taking cenvat credit of central excise duty paid on various inputs, namely, sponge iron, pig iron, CPC, steel scrap, Silico Manganese etc. The investigating officers were of the view that - (a) as per various standard books, iron oxide content of sponge iron is maximum 8% by weight, (b) MS ingots contains 0.15% to 0.25% of carbon, (c) steel scrap contains 0.15% of carbon, (d) silico manganese contains 1.5% of carbon, (e) carbon content of pig iron is 3.6%, (f) calcined petroleum coke (CPC) is99% of carbon out of 60% carbon is recoverable and (f) actual mild steel recovery from the raw material in an induction furnace unit should be 87% as against 77% to 81% mild steel recovery shown in the appellants records. On the basis of these assumptions, the investigating officers calculated, the quantum of consumption of pig iron, steel scrap and CPC which would be required for production of MS ingots as recorded by the appellant in their record for the years 2006-07 to 2010-11.

Accordingly, the department has alleged that while during 2006-07,2007-08, 2008-09, 2009-10 and 2010-11 (upto December, 2011), the appellant have shown the consumption of pig iron as 6552 MT, 7662 MT,8370 MT,8775 MT and 4539 MT respectively, their actual consumption of pig iron during these periods was 2115 MT, 2125 MT,2839 MT, 4010 NT and 1558 MT respectively, as, if the quantity of pig iron as claimed by the appellant is used the percentage of carbon in the mild steel manufactured would be much higher than the desired level of 0.25% and steel produced would not be mild steel but would be high carbon steel which cannot be used for manufacture of MS bars. On the basis of the similar calculations, it has been alleged that while the appellant during the period 2007-08, have claimed the consumption 7619 MT of MS scrap, actual consumption should be 6896 MT and similarly, it has been alleged that while during the period 2006-07 and 2007-08, the appellant have shown CPC consumption of 194 MT and 333 MT respectively in their record, the actual consumption of this item during the period was 149 MT and 155 MT respectively.

Since the quantum of receipt of pig iron, steel scrap and CPC has not been disputed and quantity of MS ingots manufactured, as shown in the record, has also not been disputed, it has been alleged that excess consumption of pig iron, CPC and steel scrap shown by the appellant during 2006-07 to 2010-11 (upto December, 2011) has been illicitly diverted without reversing cenvat credit. It is on this basis that the proceedings were initiated by way of issue of show cause notice dt.6.5.11 for recovery of cenvat credit of Rs.5,69,46,336/- during the period 2006-07 to 2010-11 under Rule 14 of Cenvat Credit Rules, 2004 read with proviso to section 11A (1) of the Central Excise Act, 1944 alongwith interest on it under section 11AB and also for imposition of penalty on the appellant company under Rule 15 (2) read with section 11AC and also under Rule 25 of Central Excise Rules, 2002. Another show cause notice dt.1.2.12 was issued to the appellant for recovery of cenvat credit of Rs.73,49,835/- for the period from January, 2011 to December, 2011 under Rule 14 of Cenvat Credit Rules, 2004 read with section 11A(1) of the Central Excise Act, 1944 alongwith interest on it under section 11AB and also for imposition of penalty on the appellant company under Rule 15 (2) read with section 11AC and also under Rule 25 of Central Excise Rules, 2002.

1.4 Both show cause notices were adjudicated by the Commissioner of Central Excise by two separate Orders-in-Original dt.31.12.12 by which the above mentioned cenvat credit demands were confirmed against the appellant company alongwith interest on it under section 11AB and penalty of equal amount was imposed on the appellant company under Rule 15 (2) read with section 11AC. Against these orders of the Commissioner, these appeals have been filed by the appellant.

2. Heard both sides.

3. Shri Alok Bhartwal, Advocate, the learned Counsel for the appellant, pleaded that the department is not disputing the quantity of MS ingots produced as recorded by the appellant and also it has not disputed the receipt of raw materials  sponge iron, pig iron, steel scrap, CPC and silico manganese, that the allegation of illicit diversion of cenvat credit availed on pig iron, steel scrap and CPC is based only on certain assumptions that  (a) the iron oxide content of the sponge iron cannot be more than 8%, (b) the percentage of carbon in sponge iron is 0.10%, percentage of carbon in steel scrap is 0.15%, the percentage of carbon in Silico Manganese is 1.5% and the percentage of carbon in pig iron 3.6%, (c) maximum carbon content of MS ingots is 0.25%, (d) the percentage of carbon in CPC is 99% out of which only 60% carbon is recoverable and (e) actual recovery of MS steel out of sponge iron, pig iron, iron and steel scrap, CPC and silico manganese mixture charged into the furnance is 87% as against 77% to 81% shown by the appellant and the calculations regarding consumption of sponge iron, pig iron, steel scrap and CPC used for manufacture of the quantity of MS ingots as recorded by the appellant in their records on the basis of the above assumptions, that besides this, the department also relied on the letter dt.6/8/09 of National Institute of Technology, Raipur(NIT, Raipur) stating that the calculations of the investigating officers are correct, that the assumptions regarding iron oxide content of sponge iron being not more than 8% is totally wrong, as in terms of the opinion of chartered engineer placed on record by the appellant, the iron oxide content in the sponge iron may vary from 11% to 23.15% depending on the quality of sponge iron and higher is the content of iron oxide more pig iron and carbon in the form of CPC would be required for manufacture of mild steel ingots/billets, that National Institute of Secondary Steel Technology, Ministry of Steel, Government of Indiain its opinion regarding the use of pig iron in induction furnace, after explaining sponge iron characteristics used in the manufacture of mild steel has opined that the quantity of pig iron needed is dependent upon quantity of sponge iron and nature of steel scrap used as charge and it is used to compensate carbon loss and is usually 20% to 25% of the total sponge iron added to the furnace, that the use of pig iron by the appellant is well within the limit specified in the opinion of National Institute of Secondary Steel Technology, that the allegation of taking wrong cenvat credit on alleged inflated consumption of pig iron, steel scrap, and CPC which, in turn, is based on theoretical calculations, is totally wrong, that bulk of of the total cenvat credit demand is on alleged inflated consumption of pig iron which is alleged to have been illicitly cleared without reversal of cenvat credit, that only on the basis of carbon analysis and that too assuming iron oxide content of the main raw material  sponge iron being 8%, the allegation of inflating the consumption of pig iron cannot be made as - (a) there is no physical verification or test carried out by the Revenue in respect of the appellants plant and manufacturing process, (b) no discrepancy has ever been found in the stock of pig iron and other raw materials and no test of raw materials specially sponge iron was carried out for ascertaining as to whether specifications of raw materials actually found were similar to those assumed in the carbon input and output analysis, (c) report of NIT, which does not specifically pertain to the performance of the furnace installed in the unit of the appellant, and is based on the assumptions of characteristics and specifications made by the Revenue has no evidentiary value, (d) the analysis relied upon by the Revenue pertains to assumed specifications of the raw materials and not actual performance in the factory of the appellant, (e) the central excise authorities cannot make out a case based on assumed consumption of raw material imagined by them and allege excess consumption of raw materials and (f) in the steel industry, raw material consumption varies from one unit to another and from one date to another and even from one heat to another heat within the same date and there is no universal and uniformly acceptable standard of consumption of raw materials for production of one Metric ton of MS ingots which can be adopted for determining the consumption rate of raw materials, that comparison made by the Revenue with M/s. Chhattisgarh Ferro Trade, Unit-II, Raipur is erroneous, and comparison can be made only if the appellants unit and other units are having same plant with same life span and same operational level, same specific raw material and other similarities, that no test of sponge iron received has been conducted, to ascertain its iron oxide and carbon content and similarly no experiment has been conducted by the investigating officers to ascertain the ratio of sponge iron, pig iron, steel scrap, CPC and silico manganese charged into the furnace for manufacture of MS ingots, that in the absence of such experiment, proportion of sponge iron, pig iron and steel scrap and CPC required for manufacture of MS ingots cannot be determined merely by calculations based on a series of assumptions regarding iron oxide content of sponge iron, etc., that the Revenues allegation that manufacturing cost of MS ingots is more than the price at which MS ingots were available in the market is totally wrong, as during the period of dispute, the appellant company was earning profit and never incurred any loss, that the appellant also rely upon the apex courts judgement in the case of Oudh Sugar Mills Ltd. vs. Union of India-1978 (2) ELT J-172 (SC) and Tribunals judgement in the case ofSanco plastics Pvt.Ltd. vs. CCE-Delhi-2004 (176) ELT 740 (Tri.-Del.),German Dyes & Chemicals vs. CCE, Delhi-I-2010 (261) ELT 722 (Tri.-Del.) wherein it has been held that the duty demand cannot be confirmed against an assessee purely on the basis of output and input norms, and that in view of above , the impugned orders are not sustainable.

4. Shri R.K.Gupta, the learned DR, defended the impugned order by reiterating the findings of the Commissioner in the impugned order. He, pointing out to the Commissioners findings in para 10.1 and 11 of the impugned Order-in-Original, pleaded that for manufacture of mild steel from sponge iron the maximum proportion of pig iron/ skull/ C.I.Scrap, etc. cannot be more than 8%, that C.I.scrap and skull are substitutes of pig iron, that if the appellants claim regarding quantum of pig iron used in the manufacture of MS ingots is accepted, the resultant product would have such a high carbon content, that the same would be not be mild steel but would be high carbon steel and since there is no dispute that the appellant manufacture only mild steel which was used by them for manufacture of TMT bars, it is clear that they have artificially inflated the figures of consumption of pig iron, iron scrap and CPC and excess quantity of pig iron, andsteel scrap and CPC has been illicitly removed without reversing the cenvat credit. He pleaded that the investigating officers calculations regarding the actual consumption of pig iron, steel scrap and CPC used in the manufacture of mild steel have been examined by the NIT, Raipur and have been found by the NIT to be correct, and therefore, there is no reason to doubt the correctness of the same.

Shri Gupta also pointed out to the Commissioners observations in para 8.1 and 8.2 of the impugned order and pleaded that if the appellants claim regarding quantum of consumption of pig iron, steel scrap and CPC is accepted, the cost of production of mild steel ingots would be much higher than the price at which the same were available in the open market and that it is most unlikely that an organised industry like the appellant company was producing of thousands of tons of MS ingots at per unit cost which was much higher that the market price of MS ingots and use of such high cost MS ingots would make the manufacture of TMT bars by them uneconomic. He pleaded that the appellant company has not given any explanation, whatsoever to justify such a high consumption of pig iron, scrap and CPC, in their records for the manufacture of MS ingots which looking to required carbon content of mild steel  0.25% is not possible. He, therefore, pleaded that difference between the consumption of pig iron, iron and steel scrap and CPC, as estimated by the investigating officers and as recorded by the appellant in their statutory records has been illicitly diverted without reversing cenvat credit and hence there is no infirmity in the impugned orders.

5. We have considered the submissions from both sides and perused the records.

6. The appellant manufacture MS ingots and from MS Ingots they manufacture TMT bars. For the manufacture of MS ingots, they require sponge iron which is the main raw material. Alongwith sponge iron, certain quantities of iron and steel scrap, pig iron, CPC and Silico Manganese are used. There is no dispute about the quantum of production of MS ingots and there is no allegation that the same has been under reported. The appellant have availed cenvat credit in respect of sponge iron,iron and steel scrap, pig iron, CPC and Silico Manganese, and there is no dispute about the quantum of receipt of these items during the period of dispute in respect of which cenvat credit has been availed. In fact, in this case, no enquiry has been conducted with the suppliers of sponge iron, iron and steel scrap, pig iron, CPC, etc. and the quantity of receipt of these items received is not disputed. The departments allegation against the appellant is that during the period of dispute, they have inflated the consumption of pig iron, iron and steel scrap and CPC and the quantities of these items claimed to have been consumed for production of MS ingots, as recorded in the appellants books of accounts, is not possible and the difference between the consumption of these items claimed by the appellant and the consumption estimated by the department on the basis of its calculations which is the actual consumption, has been illicitly removed without reversing the cenvat credit. It is on this basis that the cenvat credit demand Rs.5,69,46,336/- for the period 2006-07 to 2010-11 and the cenvat credit demand of Rs.73,49,835/- for the period from January, 2011 to December, 2011 have been confirmed. About 99% of cenvat credit demand is on the basis of alleged inflated consumption of pig iron and remaining cenvat credit demand is on the basis of alleged inflated consumption of iron and steel scrap and CPC.

7. Mild steel which is manufactured in the form of billets/ingots and which is raw material for manufacture of MS bars/TMT bars contains not more than 0.25% of carbon and the steel containing carbon in excess of 0.25% would become high carbon steel which would not be suitable for manufacture of MS ingots/TMT bars. The principal raw material for manufacture of mild steel is sponge iron which is used alongwith certain quantity of iron and steel scrap, CPC and pig iron. Sponge iron has certain percentage of iron oxide in the form of Ferrous Oxide(FeO) and also gangue which is an impurity. For reduction of iron oxide present in the sponge iron into iron, while melting the sponge iron and iron scrap mixture by heating the same in the induction furnace, certain quantity of pig iron and also, if necessary, small quantity of CPC is added. Pig iron, which contains 3.6% to 4% of carbon, and CPC which is 99% carbon are the main source of carbon required for reducing iron oxide present in the sponge iron into iron. The carbon present in pig iron and CPC, besides reducing the iron oxide into iron also contributes to the required carbon content 0.25% of mild steel. Carbon required for mild steel also comes from the carbon present in sponge iron (0.10%),Silico Manganese (1.5%) and iron/steel scrap (0.15%). The required percentage of carbon content  0.25% for mild steel is achieved by using the right mixture of sponge iron, iron/steel scrap, pig iron, Silico Manganese and CPC. However, main requirement of carbon is for reducing iron oxide present in the sponge iron into iron. The pig iron used for reducing iron oxide present in the sponge iron into iron would depend upon the content of iron oxide in the sponge iron. The department on the basis of the book called Hand Book of Sponge Iron for Rotary Kiln authored by Shri P.C.Pardhan, has assumed that sponge iron contains maximum 8% of iron oxide in the form of FeO, out of which only 50% is available for reaction (para 3.7 of the OIO dt.31/12/12). It is on this basis that the quantity of pig iron required for reducing iron oxide present in the sponge iron has been calculated by assuming that while iron oxide content of sponge iron is 8%, the pig iron contains 3.6% and CPC is 99% contain out of which 60% is recoverable.

7.1 The appellant have shown yield of MS ingots as 77% to 81% out of the total quantity of raw materials used i.e. sponge iron+steel scrap/pig iron + silico manganese + CPC. However, according to the Department, the 77% to 81% yield is on much lower side, as similar induction furnace units which make MS ingots from sponge iron have 87% yield. Accordingly, the departments stand is that the yield of MS ingots in the factory of the appellant company is 87%. But the department, instead of estimating the production of MS ingots and on this basis, the production of bars, on the basis of the recorded consumption of raw material and 87% yield and alleging clandestine clearance of bars or MS ingots, has gone in a different direction.

7.2 The department does not even dispute the quantity of raw material received i.e. sponge iron, pig iron, steel scrap, silico manganese and CPC and the quantity of the production of MS ingots. The department on the basis of recorded production of MS ingots and assuming 87% yield, has calculated the total quantity of raw material consumed for production of the recorded quantity of MS ingots i.e. raw material consumed = (recorded production of MS ingots X 100)/87. But the department does not challenge the consumption of sponge iron. The figures of sponge iron consumed has been adopted from the appellants records. On the basis of the quantity of sponge iron consumed, the actual consumption of pig iron required for manufacture of MS steel with carbon content not exceeding 0.25% has been calculated by a complicated calculation and a series of assumptions.

7.2.1 The assumption for the calculation of the quantity of pig iron consumed as gleaned from para 3.7 of the OIO dt.31/12/12 are  (i) iron oxide content of sponge iron is in form of Ferrous oxide (FeO) only and is 8% and out of this quantity of FeO present in sponge iron, only 50% is available for reaction; and (ii) carbon content of sponge iron, pig iron, iron/steel scrap, silico manganese which goes into MS steel to ensure its carbon content as 0.25%, is 0.10%, 3.6%, 0.15% and 1.5% respectively and while CPC is 99% carbon, only 60% of its carbon content goes into MS steel.

7.2.2 Total carbon input required for manufacture of a given quantity of mild steel with 0.25% carbon content from sponge iron has been calculated as 

0.25% of quantity of mild steel manufactured + carbon required for reducing the FeO present in sponge iron.

The carbon required for reducing the FeO present in sponge iron has been calculated by the formula 

Quantity of sponge iron used x O.8 x (16/72) x (12 /32). The fraction 16/72 represents the proportion of oxygen in FeO and the fraction 12/32 represents the fact that 12 kgs of carbon is required to react with 32kgs of oxygen to form Carbon di oxide (CO2). Another assumption in this calculation is that only 50% of FeO present in sponge iron is available for reaction with carbon.

7.2.3 From the above carbon input required for manufacture of a given quantity of mild steel from sponge iron, the contribution of carbon from  (a) sponge iron (0.10%) (b) iron& steel scrap (o.15%); (c) Silico Manganese (1.5%) and (d) CPC (60% of 99% of CPC) used has been deducted.

7.2.4 From the carbon input required for manufacture of a given quantity of mild steel, as calculated in para 7.2.2 (say X), the carbon contribution from sponge iron, iron/steel scrap, CPC and silico manganese, as calculated in para 7.2.3 (say Y) has been deducted. The carbon contribution (X-Y) has been treated as the carbon contribution from pig iron.

7.2.5 On the basis of carbon contribution (X-Y) from pig iron, the quantity of pig iron has been calculated as 100 x (x-y) divided by 3.6. It is this estimated consumption of pig iron which has been compared with the actual consumption of pig iron and the excess quantity of pig iron has been alleged to have been clandestinely cleared without reversal of cenvat credit. It is on this basis that it has been alleged that as against claimed pig iron consumption of 6552 MT, 7662 MT, 8775 MT and 4539 MT during 2006-07, 2007-08, 2008-09, 2009-10 and 2010-11 (upto December,11) respectively the actual pig iron consumption was 2115 MT, 2125 MT, 2837 MT, 4010 MT and 1558 MT respectively. Actual consumption of iron/steel scrap during 2007-08, andactual consumption of CPC during 2006-07 and 2007-08 appears to have been calculated on the basis of their proportion is total raw material charged in other units.

8. As is clear from the above mentioned method of estimating the actual consumption of pig iron, iron/steel scrap and CPC, it is based on a series of assumptions  the main assumptions being that  (a) iron oxide content of sponge iron is in form of ferrous oxide (FeO) and is 8% and out of this FeO content, only 50% would react with carbon present in pig iron, CPC, etc.; (b) only 60% of the carbon in CPC is recoverable; and (c) recovery percentage of mild steel from total raw material consumption (sponge iron + pig iron + iron/steel scrap + silico manganese + CPC) is 87% as against yield of 77-79% in the appellants unit.

8.1 In our view, there is absolutely, no basis for the above assumption when the percentage of mild steel yield from total raw material - sponge iron, pig iron, iron & steel scrap, silico manganese and CPC charged into furnace has not been ascertained by actual observation. There is also no basis given by the Department for the assumption that only 50% of the iron oxide in form of FeO, present in the sponge iron would react with carbon contributed from pig iron and CPC. If 100% of the FeO reacts with carbon, the consumption of pig iron containing carbon would increase two times.. Similarly, actual percentage of iron oxide in sponge iron has not been ascertained by taking the samples.

8.1.1 The most important assumption in the departments calculations is the iron oxide content of sponge iron. While according to the department, it is 8%, but according to the opinion of the chartered engineer placed on record by the appellant it can vary from 11% to 23%. Moreover, as per the technical literature on sponge iron [www.wikipedia.orgi.wiki.direct- reduced-iron] the sponge iron is highly susceptible to oxidation on atmosphere resulting in formation of iron oxide. Therefore, the departments assumption of iron oxide content of sponge iron being about 8% and not more cannot be treated as absolute truth. The pig iron content would depend upon the iron oxide content. According to the opinion dt.1/1/13 of National Institute of Secondary Steel Technology of the Ministry of Steel, Govt. of India, pig iron required is about 20% to 25% of the sponge iron.

8.2 Thus, the entire case of the department against the appellant company is based on a series of assumptions for which there is no justification and the calculations based on the same. When there are conflicting opinions about the iron oxide content of sponge iron and the proportion of pig iron to be used for manufacture of mild steel from sponge iroin and there is no basis for other assumptions like only 50% of FeO present in sponge iron reacting with carbon contributed from pig iron & CPC, the departments allegation regarding inflating the consumption of pig iron, Iron/steel scrap and CPC would not be sustainable, more so, when the cross examination of the officers who made these calculations and of the NIT professors who concurred with the Departmental officers calculations has not be allowed.

9. The apex court in the case of Oudh Sugar Mills Ltd.(supra) held that merely on the basis of calculations of raw materials fed into the process or on the basis of working of the machinery as noticed during the inspection and without any other tangible evidence on record of duty evasion, allegation of clandestine removal cannot be made against an assessee. In the present case, the allegation of inflated consumption of pig iron, iron and steel scrap and CPC is based only on calculations by the investigating officers which, in turn, are based on a series of assumptions regarding yield of mild steel from total raw materials charged, iron oxide content of sponge iron and out of which only 50% of iron oxide reacting with carbon, for which we do not find any concrete basis. No actual physical inspection to ascertain the actual proportion of sponge iron, pig iron, iron and steel scrap and CPC charged into furnace for manufacture of mild steel, and no tests to ascertain iron oxide content of sponge iron used, which were the easiest and simplest things to do, have been done. In view of this, we hold that merely on the basis of assumptions of the department which are without any basis and the calculations based on these assumptions, the allegations of inflated consumption of pig iron, CPC and iron and steel scrap cannot be made against the appellant and the Cenvat credit demand based on such allegations would not be sustainable.

10. In view of the above discussion, the impugned orders are set aside. The appeals are allowed.

(Pronounced in the open court 9.6.2015)

(SULEKHA BEEVI C.S.) (RAKESH KUMAR)

MEMBER (JUDICIAL) MEMBER (TECHNICAL)

mk

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