TMI Blog2013 (10) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... balance, and could have been ascertained by the appellant from the monthly returns filed with the department - no exercise has been done by the appellant on this front - the balance as on 27.03.1996 i.e. on the day of fire as worked out by the appellant is unconvincing and the order to that extent which rejects such a claim by the appellant is upheld. Reversal of MODVAT Credit – Held that:- The amount of modvat credit that needs to be reversed on the bought out items - the first appellate authority has tried to work out actual modvat credit availed on the basis of average rate of duty - the calculation of duty on brought of the first appellate authority seems to be erroneous, if the value of the bought out items as worked out by the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing premises and, as a result, inputs, semi finished goods, finished goods and bought-out parts were destroyed in fire. All the record relating to the account of central excise were destroyed in the fire accident. In their annual accounts for the year 1995-96, they had shown an amount of Rs. 5,66,59,563 /- as insurance claim receivable. This amount pertained to the loss of raw materials/inputs, semi-finished goods and finished goods. On the basis of detailed information submitted by the Appellants vide their letter dated 17.06.97, it was observed as under. (i) The appellants had availed modvat credit of Rs. 12,14,252 /- on inputs viz. Plastic Granules. The inputs were destroyed before being used in the final products. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner to re-determine the duty levible on the inputs and to pass a speaking order a per law keeping in view the observations of the Commissioner (Appeals) that the inputs which have been actually used in or in relation to the manufacture of final products are eligible for modvat credit. As per the directives of the aforesaid order-in-appeal dated 27.04.99, the Assistant Commissioner passed an order-in-original no. D/81/Div.VI/99 dt . 10.1.2000 wherein he confirmed the demand of Rs. 29,44,053/- [Rs. 12,14,252/- on input i.e. Plastic Granules + Rs. 17,29,801/- on bought-out parts] under rule 571(2) of the Central Excise Rules, 1944 along with interest if he modvat credit amount was not paid within the time limit stipulated in law. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectively as on 27.03.1996, needs to adjusted. The net payable amount thus worked out to Rs. 12,78,986 /-. They further submitted that a sum of Rs. 21,00,000 /- had been deposited by them under section 35F proceedings, as per details in Annexure-II of their written submissions dated 19.10.2006. 2. The First Appellate Authority after considering submissions made by the appellant herein has again held that the appellant is liable to reverse an amount of Rs. 10,37,880/- as cenvat credit on the bought out items an amount of Rs. 96,917 and 2,60,046/- as unutilised balance in RG-23A Part-II and PLA respectively. 3. Ld. counsel appearing on behalf of the appellant submits that they have no objection with regard to demand of Rs. 12,10,252 /- whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued, the modvat credit that needs to be revered, as worked out by the appellant should also considered as correct. It is his further submission that the appellant had also sought benefit of the amount of opening balance in RG-23A part-II and PLA on the date of fire, as an adjustment. It is his submission that balance was worked out by the appellant based upon the reconstruction of the records from the records of their head office M/s. Milton Plastic Ltd, Mumbai. It is his submission since all the stocks were destroyed and the records were also burnt, they had worked out the closing balance as on 27.03.1996 which is Rs.96,317/- in RG-23A Part-II and 2,16,046/- in PLA. It is his submission that in the appellant's own case this bench vide fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent which rejects such a claim by the appellant is upheld. 7. As regards the amount of modvat credit that needs to be reversed on the bought out items, we find that the first appellate authority has tried to work out actual modvat credit availed on the basis of average rate of duty. That appellate authority has held that it would be reasonable to compute the demand @ of 20% which is highest rate of duty involved in the bought out items which got burnt in the fire. In our considered view, this calculation of duty on brought of the first appellate authority seems to be erroneous, inasmuch as if the value of the bought out items as worked out by the appellant is considered, then the calculation of modvat / cenvat credit on such items bas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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