TaxTMI 
TaxTMI 
2007 (3) TMI 47
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....semi-finished goods valued at Rs. 67,87,845/- was destroyed. The appellant, therefore, filed application for remission of excise duty which was leviable on finished and semi-finished goods. By order dated 17-5-2004, remission of duty amount of Rs. 3,01,279/- in respect of finished goods destroyed was allowed. However, remission of excise duty (Cenvat involved) on semi-finished goods was not allowed on the ground that the semi-finished goods had not reached a marketable stage. The excess duty in respect of finished goods was Rs. 1,60,247/- and since remission was not allowed, the appellant had approached the insurance company claiming that amount. However, the insurance company did not pay the amount of Rs. 1,60,247/-, advising the appellant....
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....e finished goods on which duty has been remitted due to damage or destruction etc is not permissible and the dues should be recovered with interest. The present Excise Appeal No. 1462 of 2005, has been preferred against this order. 3. The appellant had by letter dated 10-1-2005 applied to the proper officer for the sanction of the amounts of duty and interest paid by them voluntarily by debiting their PLA to the extent of the duty amount of Rs. 47,379/- and the interest amount of Rs. 2,761/-, i.e., in all Its. 50,140/-. The refund was sought on the ground that, in a fire that took place on 22-10-2003, the finished goods were destroyed. Cenvat credit availed on inputs used in such finished goods was of Rs. 47,379/-. The appellant pointed ou....
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....een lost in fire in godowns or road accidents. It was observed that the appellant could seek compensation from insurance company. It was further held that the Board's circular dated 7-8-2002, on which reliance was placed, related to Modvat Rules as they existed up to 31-3-2000 and that the Board had not issued any circular which related to the law, as it existed after 1-4-2002. It was also observed that it was not expedient to charge duty on goods that never get removed because such a position would induce manufacturers to keep damaged goods perpetually inside the factory. It was further observed that, public purpose behind such remission was evident, and it could even be an act of legislative grace to a manufacturer who had suffered loss d....
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.... the inputs contained in the finished products on which duty remission had been granted, was admissible and reversal thereof, shall not be necessary and issued a clarification that credit of duty paid on inputs used in the manufacture of finished goods on which duty had been remitted due to damage or destruction etc., was not permissible and the dues with interest should be recovered. On the other hand, the learned Counsel for the appellants has contended that the very basis of the circular dated 1-10-2004 on which reliance was placed by the authorities be low, no more existed after the decision in Mafatlal Industries Ltd. came to be over ruled by the Larger Bench of the Tribunal on 7-8-2006 in Grasim Industries v. CCE, Indore reported in 2....
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.... it was held that the appellants were entitled to Modvat credit on inputs used in the manufacture of final product destroyed by fire accident on which remission of duty had been granted by the department. This decision was approvingly referred to by the Larger Bench in Grasim Industries. Thus, the very basis for the issuance of the circular dated 1-10-2004, ceased to exist after the overruling of the decision in Mafatlal Industries Ltd. Therefore, the impugned orders which have been based on the ratio of the decision in Mafatlal Industries Ltd., and the circular of the Board dated 1-10-2004 issued pursuant thereto, cannot be sustained. 7. It would, however, be seen from the impugned orders that the Commissioner (Appeals) have not directed ....