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TMI Blog2013 (9) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case are that M/s. Petrox Containers are holding Central Excise Registration and are engaged in the manufacture of excisable goods viz. metal cans falling under Chapter sub-heading No. 7310 21 10 of the Central Excise Tariff Act, 1985. During the course of audit on the records of the applicants it was noticed that they had received insurance claim of Rs. 10,03,710/- for the finished goods, inputs etc. damaged due to floods in July 2005. 2.1 Accordingly, a show cause notice dated 27-4-2007 was issued to the party for demand of duty Rs. 1,27,655/- on the finished goods under the proviso to Section 11A(1) of Central Excise Act, 1944, (ii) Cenvat credit of Rs. 36,151/- involved in the inputs under the provisions of Rule 14 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finished goods had not been cleared and that they were destroyed before their removal from the factory of manufacture and considering the fact that the duty of Central Excise is leviable in terms of Rule 8 only on removal of goods from the factory. While Section 3 is charging section for levying Central Excise duty, whereas the manner in which the same is required to be collected has been given under Rule 8. No duty therefore can be recovered unless the goods are removed from the place of manufacture. 3.2 The party do not dispute that the raw materials and packing materials had not been issued for manufacture and they were destroyed without they being put their intended use i.e. for manufacture of finished products. Once it is establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds to be filed by the unit immediately after having suffered the damages to the excisable goods. 4.3 Commissioner (Appeals) should have appreciated the fact that in absence of proper Remission Applicatoin filed by the unit, remission of duty cannot be granted. Further, in absence of duty being remitted by the proper Officer, the adjudicating authority is left with no option but to confirm the demand of duty involved on excisable goods under reference. 4.4 In view of these facts, it appears that the Commissioner (Appeals) has erred in setting aside the Orders-in-Original No. 08/07-08, dated 23-7-2007 and therefore the decision of setting aside the Orders-in-Original is not legal and proper. 5. A show cause notice was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges to the excisable goods. In this connection, we also beg to draw your kind attention to the provisions of Rule 21 of Central Excise Rules, 2002, which states as follows : "Rule 21. Remission of duty. - Where it is shown to the satisfaction of the Commissioner that goods have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal, he may remit the duty payable on such goods, subject to such conditions as may be imposed by him by order in writing :" A perusal of the aforesaid Rule 21 indicates that there is no stipulation of immediately filing the remission application by the assessee after having suffered the damages to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant case, the damaged finished goods and inputs are still lying in the factory. This fact is not disputed at all. However, original authority confirmed the duty demand in finished goods as well as inputs along with interest and penalty. Commissioner (Appeals) has set aside the demand of Rs. 1,27,655/- on finished goods since the same are removed from factory and directed the party to file remission application under Rule 21 of Central Excise Rules, 2002. The department has contested said order-in-appeal on the ground that original authority has no option but to confirm the demand in the absence of application for remission of duty and also contested the direction of Commissioner (Appeals) to party to file remission application at st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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