Tribunal grants stay against excise duty recovery for destroyed products, waives pre-deposit.

The tribunal found in favor of the appellant, waiving the requirement of pre-deposit and granting a stay against recovery of central excise duty on finished products destroyed during a violent incident at their factory. The tribunal considered the appellant's efforts to seek protection, file FIRs, and the substantial loss exceeding Rs. 50 crores suffered by the appellant. It acknowledged the challenges in controlling a violent mob even with police protection and deemed the appellant's case for waiver of pre-deposit and stay against recovery as prima facie valid.

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Issues:
1. Liability to pay central excise duty on finished products destroyed during violence at factory.

Analysis:
The primary issue in this case revolves around the liability of the appellant to pay central excise duty on finished products destroyed during a violent incident at their factory. The appellant's factory was destroyed during a violent episode involving employees and the public, resulting in significant damage. Despite the appellant's efforts to seek protection and file FIRs, the factory was set on fire, leading to the destruction of finished goods. The Range Superintendent estimated the duty involved in the finished goods destroyed in September 2012.

The subsequent proceedings initiated by the authorities aimed at recovering the duty on the destroyed goods, imposing interest and penalties under relevant sections and rules. The basis for the demand, interest, and penalty included allegations of negligence on the appellant's part for not seeking sufficient protection from the police, failure to reverse CENVAT credit, and not applying for remission under Rule 21. The appellant, however, had reversed the CENVAT credit of inputs used in the destroyed goods as required and had sought remission under Rule 21 in their response to the show-cause notice.

Considering the circumstances and actions taken by the appellant, including seeking protection, approaching the High Court for assistance, filing FIRs, and the substantial loss suffered by the appellant exceeding Rs. 50 crores, the tribunal found that the appellant had made a prima facie case for waiver of pre-deposit and stay against recovery. The tribunal acknowledged that even with police protection, controlling a huge crowd during mob violence is challenging, and the loss to the appellant far exceeded the loss to the government in terms of central excise revenue. Therefore, the tribunal waived the requirement of pre-deposit and granted a stay against recovery during the appeal process.

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