TaxTMI 
TaxTMI 
2024 (4) TMI 372
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....oduction, at the work-in-progress stage, were destroyed in fire in the factory of the appellant during October 2016, vide the impugned Order-in-Original dt.19.12.2017 by the Commissioner. 2. The Brief facts are that the appellant is a manufacturer of Chlorinated Paraffin (CP) falling under Chapter 38 and used in manufacture of PVC, plastic and leather products. The appellant manufactures various grades of CP depending on usage of the product in different applications. The CP of various grades vary in respect of their thermal stability, viscosity, refractive index, colour, etc. 3. CP is manufactured by chlorination of liquid paraffin and adding of Olefins and other materials in the process. Liquid Paraffin consists of carbon chain C9 t....
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....blending tanks with magnetic filters and mechanical filters with the help of circulating pumps, the blended material is issued for further production for each particular application. Once the raw materials are blended, it cannot be used for any purpose other than the product which is intended to be manufactured. Hence blended material is to be treated as work-in-progress. The blending of oil is done from various storage tanks as per final characteristic of plasticiser namely flexibility, whiteness, shining, transparency, electrical resistance and clarity. Thereafter, oil from blending tank 1-12 (any one at a time) is taken through pump P3 and NRV2 and magnetic filter F12 to Melter 1-6 where steam received from SRAAC Ltd is used for heating ....
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...., the appellant had filed a letter/representation dt.28.12.2016 before the Commissioner intimating about the fire accident giving details of materials destroyed and praying for remission of duty on all the goods including inputs, packing materials, etc., though there is no legal requirement of such remission of duty availed as credit. It was clearly mentioned in the said application quantity of paraffin oil issued for blending and also in the process and this WIP material consists of major portion of the material destroyed. 6. The appellant had received a letter dated 22.06.2017 intimating that the Commissioner sanctioned remission of duty of Rs.4,17,438/- only on the materials/manufactured goods destroyed. The said letter did not contai....
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....18/- is to be reversed. f) ISO Resin is to be treated as input and hence Rs.6,188/- availed on the same is to be reversed. g) Excess credit of Rs.1,33,938/- reversed shall be claimed following procedure under Section 11B of the CE Act, 1944. 8. As no speaking order was passed by the Commissioner, the appellant was advised that no appeal may be filed in absence of a speaking order. Further the appellant by letter dated 26.12.2017, urged before the Commissioner that there is no requirement of reversal of credit since the material was already issued for production and available in the blended tanks or in reactors and hence the destruction of raw materials or inputs is not destroyed as such, and already issued for productio....
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....blending tanks. CA certificate was issued for the purpose of claiming insurance and the same cannot be relied upon for ordering the reversal of credit. c) The contention of the Commissioner that the appellant himself had asked for remission is incorrect. The appellant asked remission of the credit availed treating this as duty under Rule 3 of CCR, though no such provision exists in the law. He did not ask for remission from reversal of credit. The same could have denied on legal grounds, stating that no such provision exists. d) It is a settled legal position that credit availed on inputs existing in WIP material cannot be demanded. Rule 3(5B) of CCR provides for reversal of credit taken on inputs if they are destroyed as ....
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.... 986 - Bombay High Court] 10. Opposing the appeal, Learned AR for revenue relies on the impugned order/letter dated 19.12.2017 of the learned Commissioner. 11. Having considered the rival contentions, we find that under the Cenvat Credit Rules, Rule 3(5) provides - when inputs or capital goods on which credit has been taken are removed as such from the factory or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice. Further rule 3(5C) of CCR provides - where any goods manufactured or produced by the assess....