2009 (7) TMI 623

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....ory and conducted stock verification. The said officers detected shortage of 298 pieces of 15" CRT duty paid inputs involving Cenvat credit of Rs.70,328/-. The representative of the respondents could not explain the reasons for shortage and debited the duty. Subsequently, they explained that the said goods were damaged during the manufacturing process. The Original Authority confirmed the demand of duty and appropriated the amount as deposited by them. He also imposed penalty of equal amount under Section 11AC of Central Excise Act, 1944. The Commissioner (Appeals) set aside the adjudication order. Hence, the Revenue filed this appeal. 3. Ld. DR on behalf of the Revenue reiterates the grounds of appeal. He submits that the shortage was d....

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....erable from them. The findings of the Original Authority is that the respondents had availed the Cenvat credit on the inputs which had not gone into in the manufacture of final products. I find that the Original Authority accepted the inputs got damaged during the process of manufacture of final products. The finding of the Commissioner (Appeals) is as under:- "I have carefully examined the case records including the appellants submissions made in writing and at the time of personal hearing and observe that as contended by the Appellants the Cenvat Credit reversal can only be asked under Rule 3(4) of Cenvat Rules, where there has been any removal of the inputs as such from the factory. In the present case, the goods were damaged due to m....

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.... goods need not be reversed. In the case of Mafatlal Industries (supra), the Tribunal agreed with the earlier view in the case of Inalsa Ltd. (supra) that remission of duty on finished goods cannot be equated with exemption to goods. However, it is further held that in case remissions granted to finished goods destroyed in fire, a manufacturer is not entitled for credit of duty in respect of inputs used in the manufacture of such goods. We find that the Tribunal in the case of CCE v. Indchem Electronics reported in 2003 (151) E.L.T. 393 has taken the view that inputs which were to be used in the manufacture of final product and the final product was destroyed due to fire and remission of duty was granted, the credit in respect of inputs use....