2018 (11) TMI 1941 - AT - Central Excise

Tribunal overturns recovery order, emphasizes respect for decisions, directs against penal action

Park Nonwovens Pvt. Ltd. Versus CCE, Panchkula

The Tribunal set aside the order seeking recovery of cenvat credit on inputs lost in a fire incident, citing a previous decision in the appellant's favor ... Recovery of remission of duty - semi finished goods lost in fire - Rule 21 of the Central Excise Rules, 2002 - HELD THAT:- The said issue has already been settled by this Tribunal in appellant’s own case while entertaining the claim of remission of duty by this Tribunal in PARK NONWOVENS PVT. LTD. VERSUS CCE, DELHI-III [2017 (3) TMI 1923 - CESTAT DELHI] wherein it has been held that the appellant is not required to reverse the cenvat credit contained in work in progress finished goods and semi finished goods. Taking note that the said order which has been accepted by the Revenue, the ld. Commissioner (A) was not required to pass the impugned order for recovery of cenvat credit on inputs contained in work in progress of semi finished goods which shows that the ld. Commissioner (A) have no regard to the order passed by this Tribunal, it is found that recently the Hon’ble High Court of Karnataka in the case of XL HEALTH CORPORATION INDIA PVT. LTD. VERSUS THE UNION OF INDIA, DEPUTY COMMISSIONER SERVICE TAX, DIVISION-III SERVICE TAX-I, COMMISSIONERATE [2018 (10) TMI 1565 - KARNATAKA HIGH COURT] observed that the ld. Commissioner (A) has not given any regard to the Tribunal’s orders imposed a fine of Rs. 1 Lac on the Ld. Commissioner (A). In that circumstances, the Commissioner (A) has not respected the order of this Tribunal required to be penalized. Therefore, the ld. Commissioner (A) is directed to take care in future to avoid any penal action from this Tribunal. The impugned order is set aside. The appeal is allowed. Issues: Appeal against recovery of cenvat credit on inputs lost in fire incident.Analysis:The appellant appealed against an order seeking to recover cenvat credit on inputs lost in a fire incident. The facts revealed that a fire occurred in the factory premises, resulting in the destruction of certain inputs issued for work in progress, semi-finished goods, and finished goods. Initially, the claim for remission of duty under Rule 21 of the Central Excise Rules, 2002, was rejected by the ld. Commissioner (A). However, upon appeal to the Tribunal, the remission claim was allowed. Subsequently, a show cause notice was issued for the recovery of cenvat credit on inputs contained in the semi-finished and finished goods lost in the fire. The matter was adjudicated, and the cenvat credit on inputs in semi-finished goods was sought to be recovered through the impugned order, leading to the current appeal.The Tribunal considered the issue in light of its previous decision in the appellant's case, where it was held that the appellant was not required to reverse the cenvat credit contained in work in progress, finished goods, and semi-finished goods. The Tribunal noted that the order had been accepted by the Revenue, indicating that the ld. Commissioner (A) should not have passed the impugned order for the recovery of cenvat credit on inputs in semi-finished goods. The Tribunal referenced a recent judgment of the Hon'ble High Court of Karnataka, highlighting the importance of respecting the Tribunal's orders. In that case, the Court imposed a fine on the ld. Commissioner (A) for not giving regard to the Tribunal's orders. Consequently, the Tribunal directed the ld. Commissioner (A) to take care in the future to avoid any penal action from the Tribunal.Based on the above analysis, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief. The decision was dictated and pronounced in open court, concluding the matter.