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M/s Rini Life Science Pvt. Ltd. Versus CCE, Indore

2016 (7) TMI 1024 - CESTAT NEW DELHI

Cenvat credit availed on inputs and inputs contained in final products lost due to fire - correctness of denial of credit which are attributable to the credit on inputs which are already used in the manufacture of final products and such final products is lost in fire - Levy of penalty - Held that:- when the final product is lost in fire accident subsequently the question of reversal can be decided only in terms of Rule 3 (5C) of Cenvat Credit Rules, 2004. Since, in the present case there is no .....

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in that. The intervening fire accident resulted in possible loss of credit for the appellant which in any case cannot be penalized by invoking Rule 15 (2) without any reason attributed. - In view of the above discussion, the finding in the impugned order w.r.t. Cenvat credit on inputs contained in final products lost in fire accident as well as the whole of penalty imposed on the appellant is set aside. - Decided in favor of assessee. - Excise Appeal No. 51348 of 2016 (SM) - Final Order No. .....

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here was a fire accident in their factory resulting in loss of certain inputs as well as goods in process. They have intimated the Department on 15/10/2007 itself followed by a detailed request on 01/1/2008 seeking remission of duty of ₹ 8,50,064/-. Till date no formal order has been issued on the said remission application. In 2010, consequent upon an audit of their record and as pointed out by the audit officers the appellant reversed an amount of ₹ 5,60,267/- towards Cenvat credit .....

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submitted that though they reversed the full credit immediately on being pointed out by the audit, they are contesting the correctness of denial of credit of ₹ 1,05,726/- which are attributable to the credit on inputs which are already used in the manufacture of final products and such final products is lost in fire. The learned Counsel submitted that no recovery of such credit on inputs is sustainable in the present case as Rule 3 (5C) of Cenvat Credit Rules, 2004 talks about reversal of .....

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Authorities. He submitted that there is absolutely no case for imposition of penalty as the fire accident has been intimated within two days to the Department followed up by detailed request for remission of duty on raw material as well as finished goods. In such situation there is no ground for penal action. Further, it is a fact that both the lower Authorities have not specified the grounds under which such penalty action can be taken. 3. The learned AR reiterated the findings of the lower Au .....

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