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TMI Blog2010 (7) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... posed the following questions : Tax Appeal No. 1144 of 2009 : "(A)Whether or not the respondent is obliged to reverse Cenvat Credit on the inputs contained in finished goods/semi-finished goods destroyed in fire and such loss of finished goods/semi-finished goods has been adequately compensated by the Insurance? (B) Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in ignoring legislative intent of Modvat/Cenvat scheme that the duty paid on inputs can be taken as credit for payment of duty on the finished products so as to provide relief against the cascading effect of the Excise duty and any action otherwise would defeat the purpose of Modvat/Cenvat Scheme and would give an unwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the duties and taxes?" 3. The respondent herein is a registered manufacturer holding Central Excise Registration. On 28th August, 2005, a fire took place at the factory premises of the respondent. The said occurrence was reported to the jurisdictional Central Excise Range Superintendent on 2nd September, 2005, who visited the factory and drew up a Panchnama on 5th September, 2005. Subsequently, the assessee was asked to furnish details regarding the quantity and value of excisable goods lost in the fire pursuant to which, the assessee informed that the goods had been segregated and were ready for quantification. Some quantity of the goods was saved from fire. The quantity of finished goods, raw materials (cenvatable) and semi-fini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Circular No. 800/33/2004-C.Ex. dated 1-10-2004, inasmuch as the assessee had not reversed Cenvat credit on the inputs contained in finished products, which had been lost in the fire. The show cause notice culminated into an order dated 27th May 2008 made by the Assistant Collector, Central Excise, whereby the demand came to be confirmed along with interest. 4. The respondent carried the matter in appeal before Commissioner (Appeals) who vide order dated 12th November 2008, dismissed the appeal and upheld the order passed by the Assistant Commissioner. The assessee preferred second appeal before the Tribunal and partly succeeded. 5. Simultaneously, the respondent vide letter dated 2nd February 2006, applied for remi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in relation to the destroyed semi-finished goods was inadmissible and was required to be reversed. It was further submitted that in light of the Circular No. 800/33/2004-C.Ex. dated 1-10-2004, the respondent was also liable to reverse the Cenvat credit availed of in respect of inputs contained in the finished products which were also lost in the fire. 7. In relation to Tax Appeal No. 593 of 2010, the learned Senior Standing Counsel reiterated the grounds stated in the memo of appeal and submitted that since the assessee had not reversed the credit availed of in respect of inputs contained in finished goods destroyed, the claim for remission of duty of finished goods destroyed in fire was not available to the assessee. It was further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while holding that Cenvat credit in respect of inputs contained in finished/semi-finished goods cannot be demanded, the Tribunal has only followed the decision of the Larger Bench of the Tribunal. In absence of any distinguishing feature having been pointed out on behalf of the revenue, no infirmity can be found in the approach adopted by the Tribunal. The contention raised on behalf of the revenue vide proposed question [C] that the Tribunal has ignored jurisdictional facts that the respondent has received compensation of the value of finished goods, semi-finished goods etc. from the Insurance Company, is also misconceived inasmuch as it is apparent from the impugned order made by the Tribunal that it was submitted on behalf of the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that there are Tribunal's decisions holding that the delay in filing the application cannot be a ground for rejection of remission application when there is no dispute regarding the loss occurring as a result of circumstances outlined in the relevant rules. The Tribunal accordingly, held that the respondent was eligible for remission of duty involved in the final product. The second ground for rejecting the remission application was that the respondent had not reversed the Cenvat credit involved in the inputs contained in the final product. The Tribunal placed reliance upon decision of the Larger Bench in the case of Grasim Industries v. Commissioner of Central Excise, Indore (supra) for the proposition that there was no need to rever ..... X X X X Extracts X X X X X X X X Extracts X X X X
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