TaxTMI 
TaxTMI 
2005 (10) TMI 139
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....ed goods are stored. The appellants on 10-8-2001 informed the department about the loss of the finished goods and raw material, in response of which the Suptd. of Central Excise verified the fact and submitted his report. In respect of loss of goods due to flooding the appellants intimated the Revenue authorities on 20th August, 2001 giving the details of loss of finished goods due to heavy rain. The said claim of the appellants was also verified by the Suptd. on 24-8-2001 and he submitted his report. In both the reports i.e. 17-8-2001 and 24-8-2001 the Suptd. submitted that there was a loss due to fire and flooding. The loss in both the cases was maximum to the finished goods which were lying in stock on those days. 3. When the matter w....
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....ucts under the provisions of this Act or the rules made thereunder and such order is passed by the Commissioner (Appeals) on or after the date appointed under Section 109 of the Finance (No. 2) Act, 1998:" From the above reproduced part it may be clear that if the order is relating to the loss of goods then only the appeal would not lie before this Tribunal but in respect of Modvat credit involved in such losses it would fall under clause (d) to First proviso as enumerated above, it is admitted by the Revenue that clause (d) is not made effective till date. In view of the above I am of the opinion that since the issue covered under appeal before me is in respect of Modvat credit involved in the finished goods loss due to fire and flood, ....
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....n respect of denial of Modvat credit on the inputs which were consumed for the manufacture of the finished goods which were destroyed due to fire and due to flood. It is the fact that fire did take place on 9-8-2001 and flooding of the appellants' factory did take place on 13th & 14th August, 2001. Both the incidences which occurred in the appellants' factory were beyond human control. It is also seen that the appellants had preferred insurance claim in respect of both the incidences and they were adequately compensated by the insurance company in both the cases. As regard the Modvat credit involved in the inputs which were consumed for the manufacture of the product, which were lost due to fire and flood, I find that Para 5 of the said Maf....
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....d benefit on the appellants. Allowing such credit when the finished goods suffer no duty would amount to allowing a cash refund as it can be utilized for paying duty on other goods. There is no provision in the Central Excise Rules to either allow refund of duty paid on inputs or to grant remission of such input duty when the finished goods made from such inputs get burnt/destroyed in fire. The Modvat scheme cannot be interpreted in a way to allow such a refund/remission of duty on the inputs which is not provided for in the Rules. We, therefore, hold that credit of duty taken on inputs used in the finished goods burnt/damaged in fire, is demandable from the appellants since the remission of duty on such finished goods is being allowed by u....