TMI Blog2014 (7) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... overned by the decision of the larger bench of the Tribunal in Grasim Industries [2006 (8) TMI 69 - CESTAT,NEW DELHI] - Decided in favor of assessee. - Central Excise Appeal No. - 118 of 2014 - - - Dated:- 4-7-2014 - Hon'ble Dr. Dhananjaya Yeshwant Chandrachud, CJ Hon'ble Dilip Gupta,JJ. For the Appellant : Vinod Kant, Sr. S.C. ORDER The appeal by the Revenue arises from a decision of the Customs, Excise and Service Tax Appellate Tribunal dated 25 November 2013. The Revenue has formulated the following questions of law :- (i) Whether, it was correct and proper for the CESTAT to hold that the fire having been caused in respondents factory on account of electric short circuiting, was covered by expression u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance claim alleged by the assessee did not include the excise duty element on the destroyed goods; the quantity of destroyed goods was verifiable on the basis of records; the documents enclosed with the remission application appear to be correct; and that the accident of fire had occurred due to short circuit. The report of the Chief Fire Officer dated 18 June 2004 also noted that the fire had occurred on account of a short circuit due to overheating of cables. A notice to show cause was issued to the assessee on 25 April 2006 proposing to reject the application for remission of duty. The Adjudicating Officer held that a fire on account of short circuit did not fall within the purview of the expressions natural cause or unavoidable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision of its larger bench in Grasim Industries Vs. Commissioner of Central Excise, Indore 2007 (208) ELT 336. The Tribunal observed that instead of following the decision of the larger bench, the Commissioner had followed the Board's Circular dated 1 October 2004 holding that Departmental Circulars are binding on departmental officers. The Tribunal, following the decision of the Supreme Court in Ratan Melting Wire and Cables Industries 2005 (02) ELT 32, was of the view that the effect of a beneficial circular of the Board cannot be ignored by the Adjudicating Officer. However, where a judicial decision of a larger bench of the Tribunal holds the field and the principle of law has been adjudicated upon, the adjudicating auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Central Excise, as the case may be, has been substituted: Provided also that where such duty exceeds one lakh rupees but does not exceed five lakh rupees, the provisions of this rule shall have effect as if for the expression Commissioner , the expression Joint Commissioner of Central Excise or Additional Commissioner of Central Excise, as the case may be, has been substituted. Under rule 21, a remission of duty is contemplated where it is shown to the satisfaction of the Commissioner that goods have been lost or destroyed by (i) natural causes; or (ii) unavoidable accident; or are claimed by the manufacturer as being unfit for consumption or for marketing. The remission is to be granted subject to such conditions as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing an earlier decision in Inalsa Limited Vs. Commissioner of Central Excise, New Delhi 1997 (90) ELT 417, held that in case of remission of duty being granted in respect of goods destroyed in a fire, modvat credit on the inputs used in the manufacture of goods need not be reversed. The judgment of the larger bench of the Tribunal is reported in Grasim Industries (supra). The Tribunal held as follows:- 7. We find that reading of Rule 49 of Central Excise Rules, 1944 and Rule 21 of Central Excise Rules, 2002 which provides for remission of duty in respect of goods lost or destroyed by natural cause or by unavoidable accidents or in case goods become unfit for consumption or for marketing at any time before removal does not provide re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No.33/2007-CE (NT) dated 7 September 2007. With the amendment, sub-rule 5C was introduced into Rule 3 to the following effect :- (5C) Where on any goods manufactured or produced by an assessee, the payment of duty is ordered to be remitted under rule 21 of the Central Excise Rules, 2002, the CENVAT credit taken on the inputs used in the manufacture or production of said goods shall be reversed. Consequently, upon the introduction of sub-rule (5C) into rule 3 with effect from 7 September 2007, the subordinate legislation has clearly provided that where the payment of duty is ordered to be remitted under rule 21 of the Central Excise Rules, 2002 on goods manufactured or produced by an assessee, the Cenvat credit taken on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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