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2015 (10) TMI 1362 - CESTAT NEW DELHI

2015 (10) TMI 1362 - CESTAT NEW DELHI - TMI - Denial of CENVAT Credit - whether the assessee is entitled to take Cenvat Credit on the inputs which is gone in the process of manufacturer of final product and during the process some inputs have been lost as floor sweeping or not - Held that:- Clause (5C) to Rule 3 of the Cenvat Credit Rules, 2004 would be invoked 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 E .....

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Hence, for that reason also, reliance was placed on clause (5C) to Rule 3 of the Cenvat Credit Rules, 2004.

Following the decision in the case of Fenner India Ltd. (2014 (11) TMI 704 - MADRAS HIGH COURT) I hold that the provisions of Rule 21 of the Central Excise Rules 2002 and provisions of Rule 3(5)(c) and Cenvat Credit Rules 2004 are not applicable to the facts of this case. Consequently, the goods lost in work in process the assessee is entitled to take Cenvat Credit. Consequently .....

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ri Anurag Kapoor, Advocate ORDER Per Ashok Jindal: Both the Revenue as well as assessee are in appeal against the impugned order. Therefore, both the appeals are taken up together for disposal. 2. The facts of the case are that assessee is a manufacturer of chocolates and coco products. During the course of the manufacturing final product certain floor spillage and sweeping arises which assessee is destroying. Revenue is of the view that on these sweepings the assessee is not entitled to take Ce .....

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3(5)(c) of Cenvat Credit Rules 2004 was not in existent but for the period thereafter he denied Cenvat Credit as per Rule 3(5)(c) of the Cenvat Credit Rules 2004. Aggrieved from this order both are in appeal before me. 3. The Ld. Counsel for the assessee submits that in fact input has been taken into the process of manufacturing and during the course of manufacturing these floor sweepings arises. The floor sweepings is the input gone into the process of manufacturing. Therefore, these goods are .....

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s. CCE Bolpur-2008 (231) ELT 176 (Tri-Kolkata). He further submits that in the case of CCE Chennai Vs. Fenner India Ltd.-2014 (307) ELT 516 (Mad) the Hon ble High Court of Madras held that the assessee was not required to file remission claim under Rule 21 of the Cenvat Credit Rules 2002 for the goods destroyed as floor sweepings. Relying on the decision in the case of CCE Vs. Biopac India Corporation Ltd.-2010 (258) ELT 56 (Guj). 4. On the other hand the Ld. ARs oppose the contention of the Ld. .....

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ur-2011 (271) ELT 510 (AP) which has been affirmed by the Hon ble High Court of Rajasthan reported in 2013 (292) ELT A99 (Supreme Court). It is further submitted that as per Rule 3(5)(c) of the Cenvat Credit Rules 2004 the assessee is required to take Cenvat Credit on the inputs which have been lost during the process of floor sweeping etc. 5. The Ld. AR also relied on the decision in the case of Asian Paints (I) Ltd. Vs. CCE Mumbai-II-2004 (173) ELT 187 (Tri-Mumbai) in their support which has b .....

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ble High Court was that whether under Rule 21 of Cenvat Credit Rules 2002 the appellant was entitled to claim remission on duty which was denied by the Hon ble High Court observing as under: It becomes clear that the Commissioner may remit the duty payable on the goods if they are lost or destroyed by natural causes or by unavoidable accident or claimed by the assessee as unfit for consumption or for marketing. In this case, the plea of the appellant is that the pulp manufactured at Berhampur, a .....

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as well as appellate Commissioners left off the appellant in respect of 737 drums for which intimation was given. In so far as 198 drums were concerned, the appellate Commissioner as well as CESTAT came to the correct conclusion after appreciating the factual background. This appeal, therefore, does not involve any substantial question of law. 8. I have gone through these decisions and found that in this case the appellant has failed to satisfy the commissioner whether the goods destroyed were .....

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this Tribunal in the case of Grasim Industries (Supra). 9. Further, in the case of Gujarat Narmada Fertilizers Co. Ltd. (Supra) the issue before the Hon ble Apex Court was that when the final product was exempt from duty in that case of assessee is entitled to take Cenvat Credit or not. Admittedly, in this case final product is dutiable and assessee is not manufacturing any exempted goods. Therefore, the said decision have no relevance to the facts of this case at all. Further, I find that in t .....

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t Rules, 2004 submitted that the assessee is bound to reverse the credit taken on the inputs. Firstly, it is to be noted that the said clause (5C) was inserted to Rule 3 of the Cenvat Credit Rules, 2004, w.e.f. 07.09.2007. In fact, the High Court of Gujarat in the case of CCE Vs. Biopac India Corporation Ltd. has taken a similar view and held that goods destroyed in fire after being used for many years cannot be said as not used in the manufacture of final and finished product and the assessee n .....

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