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2019 (8) TMI 1684 - CESTAT NEW DELHILevy of Excise Duty - duty on damaged finished goods at the normal sale price/transaction value or not - extended period of limitation - penalty - HELD THAT:- Leviability of excise duty under Section 3 of the Central Excise Act arises at the event of manufacture of finished goods. Admittedly, the goods destroyed in fire in the present case were finished goods, duly entered in the RG-I Register maintained by the appellant - In the facts of the present case, definitely, the liability to excise duty has arisen when the goods had reached the stage of the finished goods and entered in the RG-I Register. The subsequent event of damage in fire does not ipso facto extinguish the tax liability. Moreover, Rule 21 of Central Excise Rules provides the assessee to seek remission from the payment of duty, so as to reduce the tax burden wherever the goods have been destroyed and rendered unfit and unmarketable. Accordingly, the appellant is liable to pay duty on the finished goods. Valuation of goods - HELD THAT:- The amount of insurance claim received plus the transaction value of the damaged finished goods will form the gross amount dutiable on cum duty basis. Also, the liability of the appellant does not extinguish on the fact that they have not claimed or received amount of the excise duty on the damaged goods from the insurance company. Accordingly, the appeal is allowed in part and remitted to the Adjudicating Authority for re-calculation of the duty payable on cum duty basis on the value indicated. Extended period of limitation - HELD THAT:- As the case of short payment of duty has arisen on the appellant mis-interpreting the provisions of Act and Rules, the extended period is rightly invoked by the Revenue. Penalty - HELD THAT:- The issue being interpretational in nature and the transactions are duly recorded in the books of accounts, thus, the penalty is not exigible. Accordingly, the penalty imposed under Rule 25 of the Central Excise Rules read with Section 11 AC is set aside. Appeal allowed in part - part matter on remand.
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