2017 (3) TMI 1923 - AT - Central Excise

Successful appeal grants remission of duty under Cenvat Excise Rules

The appellant's claim for remission of duty under Rule 21 of the Cenvat Excise Rules, 2002 was initially rejected by the Ld. Commissioner. However, upon ... Rejection of remission of duty filed under Rule 21 of the Cenvat Excise Rules, 2002 - rejection on the ground that the appellant is required to reverse the cenvat credit on inputs contained in finished goods, semi finished goods and work in progress - HELD THAT:- Considering the fact that it is a case of the claim of the remission of duty. It is not disputed the occurred of fire in the factory of the appellant, therefore, the appellant is entitled for claim of remission of duty. The only reasons to deny remission claim is that the appellant is required to reverse the cenvat credit on inputs contained in finished goods, work in progress and semi finished goods. The contention of the Ld. Commissioner is not sustainable in the light of the judgements in the case of THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. JOY FOAM PVT. LTD., CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL (CESTAT) [2015 (7) TMI 386 - MADRAS HIGH COURT] wherein the Honble High Court held that in case of fire, for the claim of remission of duty the assessee is not required to reverse the cenvat credit contained in work in progress, finished goods and semi finished goods. The impugned order deserves no merits, hence set aside by allowing the claim of remission of duty to the appellant - Appeal allowed. Issues:Claim of remission of duty under Rule 21 of the Cenvat Excise Rules, 2002 rejected by Ld. Commissioner.Analysis:The appellant appealed against the rejection of the remission of duty claim by the Ld. Commissioner. The incident involved a fire on 31.05.2013 at the appellant's factory premises due to an electric short circuit, resulting in the destruction of finished goods, work in progress, and semi-finished goods. The appellant notified the department and the police about the fire, which was not contested. The Ld. Commissioner rejected the remission claim, stating that the appellant must reverse the cenvat credit on inputs in the destroyed goods. The appellant contested this decision.Upon hearing the arguments from both sides and reviewing the case, it was established that the fire incident indeed occurred at the appellant's factory. Therefore, the appellant was deemed eligible for the remission of duty. The only basis for denying the remission claim was the requirement to reverse the cenvat credit on inputs in the destroyed goods. However, this contention was found to be unsustainable in light of the judgment in the case of Joy Foam Pvt. Ltd. The court in that case ruled that in situations involving fire, claimants are not obligated to reverse the cenvat credit on inputs in work in progress, finished goods, and semi-finished goods. Consequently, the impugned order was deemed to lack merit and was set aside. The appellant's claim for remission of duty was allowed, and the appeal was disposed of accordingly.