Custom, Excise & Service Tax Tribunal
Aurobindo Pharma Ltd vs Commissioner Of Central Excise, ... on 18 July, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/158/2007-SM [Arising out of Order-in-Appeal No. 178/2005 dated 27/12/2006 passed by the Commissioner of Central Excise & Customs, Hyderabad-I.] AUROBINDO PHARMA LTD PLOT NO.2, MYTHRI VIHAR, AMEERPET, HYDERABAD Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax HYDERABAD-I KENDRIYA SHULK BHAVAN, L.B STADIUM ROAD, BASHEERBAGH, HYDERABAD, - 500004 ANDHRA PRADESH Respondent(s)
Appearance:
Written submissions (None) For the Appellant Mr. R. Gurunathan, AC (AR) For the Respondent Date of Hearing: 18/07/2014 Date of Decision: 18/07/2014 CORAM:
HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Final Order No. 22446 / 2014 Per : S.K. MOHANTY Brief facts of the case, leading to this appeal are as under:
The appellant is a manufacturer of bulk drugs. On 23.08.2006, it filed an application under Rule 21 of Central Excise Rules, 2002 with the jurisdictional Central Excise Commissioner, seeking remission of duty, amounting to Rs.11,05,552/-, in respect of raw-materials, intermediaries and capital goods destroyed during fire accident in the factory on 08.03.2005. The remission application with regard to inputs and capital goods was rejected by the jurisdictional commissioner on the ground that the CENVAT credit involved therein, if reversible/payable, cannot be treated as duty payable in terms of Central Excise Act, 1944, which relates to clearance of finished product. With regard to the in-process material destroyed in the fire accident, the views of the learned Commissioner for non-consideration of the remission application is that since, the goods have not reached the excisable stage i.e. fully manufactured stage, duty liability is not attracted; and that in absence of any duty liability, the question of remission would not arise. In other words, according to the learned Commissioner, duty payable under the Central Excise Act on the finished excisable goods cannot be equated with the CENVAT credit liable to be reversed, and thus, the provisions of Rule 21 of the Central Excise Rules, 2002 cannot come to the rescue of the appellant with regard to remission of CENVAT credit.
2. Heard the ld. counsel for both sides and perused the records.
3. Rule 21 of Central Excise Rules, 2002 deals with remission of duty in respect of goods lost or destroyed by natural causes or by unavoidable incidents, etc. The term 'goods' used in the said rule, refers to the excisable goods manufactured in the factory of the manufacturer. The object of the said rule for remission of duty is that no excisable goods are available, for removal on payment of duty, though the incidence of levy of duty is manufacture. Duty liability is fastened to the goods at the time of removal from the factory. The excisable goods, on which duty is payable on its removal, is no more available in the factory. No provisions exist, either in the Central Excise Rules, 2002 or CENVAT Credit Rules, 2004 for remission of duty paid on inputs, capital goods or in-process materials, in view of the fact that the said goods on which CENVAT credit has been availed by the assessee, have actually not been used for the intended purpose, i.e. manufacture of the final products. Since Rule 21 of Central Excise Rules only deals with remission of duty on the manufactured goods and the said rule is silent about CENVAT credit availed on input or capital goods, it cannot be said that remission will take within its scope to cover CENVAT availed inputs and capital goods. Input and capital goods have been kept outside the purview of remission for the reason that the credit taken is required to be utilised for payment of duty on the manufactured goods. Since no goods have been manufactured, by using the input or the capital goods, remission of duty thereon cannot be admissible (at the cost of exchequer, because there is no scope for realisation of the benefit availed by the appellant towards clearance of the finished products). In this context, I find support from the decision of the Tribunal in the case of Grasim Industries Vs. CCE, Indore [2007 (208) ELT 336 (Tri. LB)] and in the case of Videocon Industries Ltd. Vs. CCE, Nagpur [2010 (262) ELT 1125 (Tri. Mumbai)] cited by the Departmental Representative, which are to the effect that application for remission does not merit consideration in the case of inputs, capital goods and in-process materials.
4. Considering the settled principles of law, I am of the considered opinion that there is no merit in the appeal filed by the appellant for remission of duty suffered on the disputed goods and accordingly the appeal is dismissed. The impugned order is upheld.
(Operative portion of the Order was pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER ssk 3