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2016 (6) TMI 443 - AT - Central ExciseCentral excise duty on finished goods - cenvat credit wrongly availed on inputs and capital goods lost in fire accident - Held that:- Regarding the duty demand/reversal of credit on capital goods, the impugned order finds that there is no legal provision during the material period for demanding duty on such damaged capital goods. These capital goods were still lying in the factory. As correctly held by the Commissioner (Appeals), the capital goods damaged in 2005 are bound by the provisions of Rule 5 A of the Cenvat Credit Rules, 2004 introduced w.e.f. 16.05.2005 and at the time of clearance of these goods, in whichever shape, they have to pay appropriate amount of duty. I find that the Appellate Authority is correct in concluding that duty on the finished goods as well as raw materials cannot be demanded merely because the appellants have not applied for the remission of duty. The finished goods and the raw materials were admittedly never cleared from the approved premises of the respondent. There is no legal provision to sustain recovery of duty only on the ground that remission application has not been filed in respect of goods lost in fire. The Tribunal in Mira Chemicals (2007 (3) TMI 653 - CESTAT, AHMEDABAD ) relying on the earlier decided cases held that when the goods were admittedly destroyed the fact that a proper application for remission of duty has not been made by the assessee, would not result in liability of excise duty. Also see Indchem Electronics (2002 (9) TMI 195 - CEGAT, CHENNAI ), Tribunal held that when the goods were destroyed due to fire accident and there is no allegation that there was any diversion of goods, there is no warrant to reverse the input-credit. The said decision has been upheld by the Hon’ble Supreme Court reported in [2003 (4) TMI 556 - Supreme Court of India ]. There could be no clearance of destroyed products. As the destructions has been an admitted fact, there could be no duty liability on the goods, which are not cleared. - Decided against revenue
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