2018 (11) TMI 415 - AT - Central Excise

Appeal allowed due to oversight in evidence review, reversing duty claim denial and Cenvat credit directive.

Deena Paints Limited Versus C.C.E., Gurgaon-I

The appeal was allowed as the Commissioner (Appeals) failed to consider crucial evidence, leading to the reversal of the duty claim denial and the ... Remission of duty - rejection on the ground that the appellant did not produce relevant documents - principles of natural justice - Held that:- The Ld. Commissioner (Appeals) while passing the impugned order has not considered the records placed before him. Therefore, the impugned order deserves no merit and is set aside. CENVAT Credit - inputs which has not been put to use - Held that:- As inputs has gone in the process of manufacturing, therefore Cenvat credit availed on inputs which has been destroyed while progress and in finished goods, the appellant is not required to reverse any Cenvat credit but on inputs which has not been put to use, the appellant is required to reverse the Cenvat credit. Appeal disposed off. Issues:1. Denial of remission claim of duty due to lack of relevant documents.2. Dispute regarding recovery of duty claim from insurance company.3. Consideration of documents by the Commissioner (Appeals).4. Requirement to reverse Cenvat credit on destroyed inputs.Analysis:1. The appellant appealed against the denial of the remission claim of duty by the Ld. Commissioner (Appeals) citing the reason that relevant documents were not produced. The case involved a fire incident in the factory premises resulting in the destruction of goods for which the appellant filed a rebate claim. The adjudicating authority initially allowed the remission claim but later issued a show cause notice to recover Cenvat credit on inputs, semi-finished goods, and finished goods. The Commissioner (Appeals) upheld the demand of duty based on the presumption that the appellant recovered the claim from the insurance company due to the lack of documentary evidence.2. During the hearing, the appellant's counsel presented a reply to a query raised by the Inspector, Central Excise, along with a certificate from a surveyor stating that the appellant did not claim any amount from the insurance company for the duty on the destroyed goods. The Member (Judicial) noted that the Commissioner (Appeals) did not consider these records, indicating a failure to review all relevant information. Consequently, the impugned order was deemed to have no merit and was set aside.3. The Member (Judicial) further observed that since the inputs were used in the manufacturing process, the Cenvat credit on destroyed inputs that were not utilized did not need to be reversed. However, the appellant was directed to reverse the Cenvat credit on inputs that were not put to use and were destroyed in the fire immediately. This decision was made to ensure compliance with the relevant regulations and to address the specific circumstances of the case.4. In conclusion, the appeal was disposed of with the direction to reverse the Cenvat credit on unused inputs that were destroyed, highlighting the importance of proper documentation and consideration of all relevant evidence in such matters to ensure a fair and just decision. The judgment provided clarity on the treatment of Cenvat credit in situations involving the destruction of goods and emphasized the need for thorough review of records before making determinations related to duty claims and remission.