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TMI Blog2015 (7) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the claim of reversal of CENVAT credit by the Department especially when Rule 21 of the Central Excise Rules, empowers the Commissioner/appellant herein to grant remission, subject to conditions as may be imposed by him? 2. Whether the 1st respondent is entitled to seek remission of duty without reversal of CENVAT credit when Rule 21 of Central Excise Rules, contemplates only a conditional remission?" 2. Despite notice, none appears for the first respondent. Hence, after hearing the learned counsel appearing for the appellant and after perusing the relevant materials placed before this Court, the following order is passed. 3. The brief facts of the case are as follows: In the fire accident occurred in the factory premises of the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Mafatlal Industries Ltd. V. CCE, Ahmedabad reported in 2003 53 RLT 578. Following the decision of the Larger Bench, the Tribunal allowed the appeal filed by the assessee. 5. Aggrieved by the said decision of the Tribunal, the Department is before this Court in this appeal. 6. The issue that arise for consideration is whether on remission of duty, the assessee is liable to reverse the cenvat credit. We find that the reasoning given by the Larger Bench of the Tribunal, which took note of the factors that i) reading of Rule 49 of the Central Excise Rules 1944 read with Rule 21 of the Central Excise Rules 2002, which provides for remission of duty in respect of goods lost or destroyed by natural cause or unavoidable incidence and cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in the case of Inalsa Ltd. v. CCE, New Delhi (supra) held that the final product has not suffered duty only as a result of remission of duty given a fulfilling the conditions, therefore, under Rule 49, it is not to be equated to a general exemption from duty or goods being charged to nil rate of duty. Therefore, the credit in respect of inputs used in the manufacture of such goods need not be reversed. In the case of Mafatlal Industries (supra), the Tribunal agreed with the earlier view in the case of Inalsa Ltd. (supra) that remission of duty on finished goods cannot be equated with exemption to goods. However, it is further held that in case remissions granted to finished goods destroyed in fire, a manufacturer is not entitled for cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the inputs can be considered to have been put to intended use for manufacture of the final product. Reading of rules under which remission is granted in respect of goods which were lost or destroyed by natural cause or by natural accident, does not provide any condition regarding reversal of credit taken in respect of inputs used on such goods, hence we are unable to support the view taken in respect of inputs used on such goods, hence we are unable to support the view taken in the case of Mafatlal Industries (supra) whereby it has been held that assessee has to reverse the credit taken of inputs used in such goods on which remission is granted. Therefore, we approve the view of the Tribunal taken in the case of Inalsa Ltd. (supra) in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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