Court grants relief to appellant for destroyed goods, ruling in favor of remission of duty.

The court set aside the Commissioner's decision and granted relief to the appellant, ruling in favor of remission of duty for destroyed goods at both the appellant's and job worker's factories. The judge emphasized that reasonable steps were taken to prevent the fire incident and clarified that duty liability did not extend to semi-finished goods at the job worker's factory. The appellant's voluntary reversal of Cenvat credit on destroyed inputs and payment of duty on confiscated goods were upheld, while the remission application for destroyed goods was approved.

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Issues:
1. Reversal of Cenvat credit on destroyed inputs.
2. Rejection of remission application for destroyed goods.
3. Duty liability for goods destroyed at the job worker's factory.

Analysis:
1. The appellant, engaged in manufacturing PU foam, experienced a fire incident resulting in the destruction of inputs and final products. The Central Excise Officer conducted a survey, documenting the damage. The appellant voluntarily reversed Cenvat credit of Rs. 3,50,798 on destroyed inputs, which was undisputed. Similarly, duty of Rs. 16,451 on confiscated goods was also not contested.

2. Subsequently, the appellant applied for remission of Rs. 11,90,775 for goods destroyed in their factory and the job worker's factory. The Commissioner rejected the remission, citing lack of evidence showing reasonable care to prevent the fire. Additionally, the Commissioner held that Rule 21 did not apply to the job worker's factory, requiring duty payment for goods destroyed there, as per Rule 16B of Central Excise Rules, 2002.

3. Upon review, the judge noted that the occurrence of fire and destruction of goods in both factories were undisputed. The judge disagreed with the Commissioner's assertion that reasonable steps were not taken to prevent the fire, emphasizing that no party would intentionally risk fire damage. Regarding goods destroyed at the job worker's factory, even if duty liability were to be considered, it would not apply to semi-finished goods. The judge clarified that the remission application was not about demanding duty for inputs sent to the job worker's factory but about remission of duty, leading to the setting aside of the Commissioner's order and granting relief to the appellant.

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