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2021 (12) TMI 238 - CESTAT MUMBAIRemission of duty - finished goods destroyed in the fire accident - inputs contained in the semi-finished goods destroyed in the fire accident - principles of natural justice - Rule 21 of Central Excise Rules, 2002 - HELD THAT:- There is no dispute between the appellants and revenue, on the findings recorded by the Commissioner in para 19 of his order. Commissioner has recorded categorically that fire on the 02.04.2015 in the premises of the appellant was accidental and there was no negligence on the part of appellants. Since revenue has not challenged this finding of the Commissioner, by way of cross objections or cross appeal, this finding of Commissioner has become final. Also at the time of hearing, learned counsel appearing for the Appellant agreed that Commissioner was correct in his findings to the effect that for the finished goods on which remission of duty as per Rule 21 of Central Excise Rules, 2002 is allowed, the CENVAT Credit taken on the inputs contained in these finished goods need to be reversed as per Rule 3 (5C) of the CENVAT Credit Rules, 2004. Rejection of request for remission of duty - HELD THAT:- Rule 21 do not limit its application only to the finished goods manufactured by the manufacturer, but would include within its ambit all those goods which “have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal.” Clearly the word goods is wide enough to include all the goods, whether finished good, raw material, packing material, semi-finished goods or the capital goods within its ambit. It is settle principle of interpretation, that interpretation should be made without adding or deleting the words used in the Rules. What is to be remitted is the duty required to be paid by the manufacturer on the goods he intends to remove from his premises. When the amount required to be paid in terms of Rule 3 (5) has been deemed to be the duty paid by the manufacturer removing the inputs as such, then claim made by such manufacturer in terms of Rule 21 for remission of these amounts cannot be brushed aside if the Commissioner is satisfied that these goods have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal. The process of production as envisaged in CENVAT Credit Scheme thus commences the moment the goods are received by the manufacturer in his manufacture, and CENVAT Credit Scheme acknowledges this fact as it allows the taking of credit and even utilization of the same instantaneously on receipt of inputs. All the inputs, packing materials whether in process of manufacture or intended to be used in the process of manufacture of the finished goods which were destroyed in fire accident and could not be used so are covered by the decision of the Hon’ble Supreme Court, we are not in position to agree with the findings recorded by the Commissioner demanding the reversal of CENVAT Credit by invoking the provisions of Rule 3 (5B) of the CENVAT Credit Rules, 2004. The demand of interest and penalties imposed by the Commissioner also set aside. Appeal allowed - decided in favor of appellant.
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