Custom, Excise & Service Tax Tribunal
M/S Dabur India Ltd vs Commr. Of Central Excise, Kolkata Iii on 17 March, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, EAST REGIONAL BENCH : KOLKATA
Ex. Appeal No.212/06
Arising out of Order-in-Appeal No.273/Kol-III/05 dated 26.12.05 passed by Commr. (Appeal I) of Central Excise, Kolkata.
For approval and signature:
SHRI S. S. KANG, HONBLE VICE PRESIDENT
SHRI M. VEERIAYAN, HONBLE TECHNICAL MEMBER
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not? :
3. Whether His Lordship wishes to see the fair copy
of the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s Dabur India Ltd.
APPELLANT(S)
VERSUS
Commr. of Central Excise, Kolkata III
RESPONDENT (S)
APPEARANCE Shri K. K. Banerjee, Advocate for the Appellant (s) Shri M. B. Bal, JDR for the Department CORAM:
SHRI S. S. KANG, HONBLE VICE PRESIDENT SHRI M. VEERIAYAN, HONBLE TECHNICAL MEMBER Date of hearing & decision : 17. 03. 2010 ORDER NO..
Per M. Veeriayan :
This is an appeal against the order the Commissioner (Appeals) bearing Order-in-Appeal No. 273/Kol-III/05 dated 26.12.05.
2. Heard both sides.
3.0 Relevant facts in brief from the records are as follows :
3.1 The appellants are manufacturing bulk drugs falling under Chapters 28 and 29 of CETA, 1985. They receive inputs, such as, Paracetamol (S/H 2942.00) Sodium Borohydride (2850.00), Caustic Potash (2914.10), Acetone (2914.10), 5% Rhodiumon Alumina Catalyst (3815.00), 2-Amino 3.5 Dibromo Benzaldahyda (2913.00) Caustic Soda Flakes (2815.00), Hydrogen (2804.90), Activated Charcoal (3802.00), 10-DAB (2939.90), Chloroform (2903.90), Ethyl Acetate (2915.90), N-N Diisopropyl Ethyne Amina (2921.00), Ruthenium Trichlride (2843.90), Tetrahydrofuran (2932.00), Silica Gel (2811.10), Methilyne Chloride (2903.90), Tolune (2902.00), Sodium Metaperiodate (2829.90), Pyridine (2933.00), Vinyl Bromide (2903.90), Campotothecine (2939.00), 4-Piheridino Piheriddine (2933.90), Lodobenzene Diacetate (2903.30), Platinum Oxide (2843.00), Triphosgene (2942.00), 1,1 Cyelobutane [Dicarhoxylic Acid (2917.90)], Potassium Tetrachloroplatinate (2843.00), Silver Nitrate (2843.00), Silver Oxide (2843.00) and take credit of duty paid on such inputs. It appears that there was heavy flood in September, 2000 (neither side is in a position to mention the date of flood). It is claimed by the appellants that in the flood, the in-process inputs worth Rs.120.69 lakhs were damaged ; that the assessee destroyed the WIP stock in presence of a Representative of the Insurance Company. When the Central Excise Officers visited on 5.4.2002, the Officers found the inputs short. The appellants deposited an amount of Rs.16.00 lakhs being the estimated credit involved on the goods which was damaged and subsequently destroyed. The original adjudicating authority in pursuance of the show-cause notice confirmed the demand of Rs.16.00 lakhs by disallowing the credit on the goods found short and appropriating amount of Rs.16.00 lakhs already debited by them ; he also ordered recovery of interest ; he also imposed penalty of Rs.16.00 lakhs. On appeal filed against order-in-original, the Commissioner (Appeals) upheld the order of the Order-in-Original in so far as the demand of duty is concerned and set aside the penalty and interest.
4. The ld. Advocate for the appellants submits that the goods were damaged due to flood after the materials have been used in the manufacture of final product; the purpose for which the inputs have been received were served and the question of denial of credit does not arise. They were forced to deposit an amount of Rs.16.00 lakhs at the time of visit of the Central Excise Officers. He fairly concedes that no refund claim has been filed by them. On a query from the Bench, as to whether there was damage of only in-process materials or also of inputs as such and finished goods, the ld. Advocate is not in a position to furnish reply to the same from the records of the case.
5. The ld. DR appearing for the Revenue submits that the claim of the appellants regarding damage of huge quantity of raw materials said to be in-process is after-thought. They have not given any intimation to the Central Excise Authorities about the damage of goods including in-process materials for claiming remission of duty. The entire facts came to the knowledge of the Department when the Central Excise officers visited and the duty involved stands paid voluntarily. He also refers to the statement of the Accounts Manager in this regard. He also submits that there is no retraction of the statement of the Accounts Manager.
6. We have carefully considered the submissions from both sides and perused the case records. The appellants claimed that the factory was flooded upto 7 ft (seven foot) due to incessant rain after office hours on a Saturday. Undisputedly, no intimation has been sent to the Central Excise Authorities. The shortage according to the Department, was detected during the visit of the Officers in April 2002 much after the flood. No details as to how much of inputs or processing materials and finished goods are damaged are available on record. It may not be a case that only inputs in-process were damaged by the flood. It may not be a case that the entire raw materials available at the time of flood was in the form of work-in-progress and that no raw materials as such and finished goods were available. The claim of the appellants was that on the date of flood, inputs valued as much as of Rs.120.69 lakhs of inputs were in the process of manufacture. This claim has not been examined with reference to the consumption pattern of raw materials by the appellants company. Details of settlement by the insurance company are also not forthcoming. In view of the above, we deem it appropriate that the entire matter requires to be considered afresh after granting a reasonable opportunity of hearing to the appellants and after permitting them to adduce evidences to be relied upon by them. To enable the same, the orders of the authorities below are set aside and the matter is remanded to the original authority for fresh consideration. All issues are kept open.
7. Appeal is thus allowed by way of remand.
(Dictated and pronounced in the open Court) sd/ sd/ ( S. S. KANG ) (M. VEERIAYAN) VICE PRESIDENT TECHNICAL MEMBER mm 11 Ex. Appeal No.212/06