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2022 (10) TMI 803 - AT - Central ExciseRemission of duty - it is alleged that the appellant did not take adequate steps and precaution in storing their finished goods as it is established that thefire accident has taken place as result of negligence which can't be considered as natural cause or unavoidable accident in order to grant remission of duty of Excise - demand of interest and imposed penalty under rule 21 of Central Excise Rules 2002 - reversal of CENVAT Credit - HELD THAT:- There is no dispute that a fire has taken place in the factory of the appellant due to short circuit and the finished goods was destroyed along with other material like packing materials and consumables. It is observed that immediately when the fire took place the management of the appellant company has intimated to the concerned local authorities i.e. Police, fire brigade, excise department, insurance company etc., and these agencies have started their respective procedure immediately. Thereafter, the jurisdictional superintendent has visited the appellant’s factory and recorded the punchnama. In the said punchnama the details were recorded about incident of fire and about the goods destroyed in fire. However, in the said punchnama, there is no mention about the allegation that the appellant have not taken any precaution to avoid the fire incident - the short circuit is a usual cause of fire in majority of cases, therefore, the fire due to short circuit cannot be attributed to any malafide on the part of the appellant or it cannot be said that the appellant have not taken abundant precaution to avoid the fire incident. Even as per the forensic report also, it has been concluded that the fire has taken place due to short circuit. In this fact, the contention of the adjudicating authority that the appellant have not taken the proper precaution to avoid the fire incident is baseless and without any support. Therefore, on this ground rejection of remission claim is unsustainable. Reversal of CENVAT credit - HELD THAT:- There is no dispute that the appellant is duty bound to reverse the cenvat credit on the inputs contained in finished goods which were destroyed in fire incident. However, on going through the Rule 3(5)(c) of Cenvat Credit Rules, it is absolutely clear that the reversal of the cenvat credit statutorily to be made only after the competent authority grant the remission of duty, therefore, the contention of the learned Commissioner that they have not reversed the credit before remission is without any basis. Thus, the appellant’s case is clearly covered under the four corners of Rule 21 of Central Excise Rules, 2002 and the appellant is clearly eligible for remission of duty on the finished goods destroyed in fire incident - the order rejecting the remission of duty is set aside - appeal allowed.
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