Custom, Excise & Service Tax Tribunal
M/S Alok Industries Ltd vs Cce Vapi on 15 February, 2018
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No : E/777/2012 (Arising out of OIO No. 03/TECH/VAPI/2012 dt. 04.09.2012 passed by Commissioner of Central Excise, Service Tax & Customs, - Vapi) M/s Alok Industries Ltd. : Appellant (s) Versus CCE Vapi : Respondent (s)
Represented by:
For Appellant (s) : Shri S. J. Vyas, Advocate For Respondent (s): Shri L. Patra, Authorised Representative CORAM:
Dr. D. M. Misra, Honble Member (Judicial) Mr. Raju, Honble Member (Technical) Date of Hearing/Decision : 15.02.2018 Order No. A/10491 / 2018 Per: Dr. D. M. Misra This is an appeal against OIO No. 03/TECH/VAPI/2012 dt. 04.09.2012 passed by Commissioner of Central Excise, Service Tax & Customs, - Vapi.
2. Briefly stated the facts of the case are that the appellant had filed an application on 25.02.2008 seeking remission of duty on the finished goods destroyed in fire occurred in the factory on 16.08.2007. The Ld. Commissioner though allowed remission of duty, but, observed that the Cenvat credit involved on the finished goods which were destroyed in fire is required to be reversed. Aggrieved by the said observation, the present appeal is filed by the appellant.
3. The Ld. Advocate Shri S. J. Vyas for the appellant submits that the issue is covered by the judgement of Honble Gujarat High Court in the case of Commissioner of Central Excise & Customs, Ahmedabad-II vs. Intas Pharmaceuticals Ltd. 2013 (4) ELT 256 (Guj.). He submits that in view of the observation of the Honble Gujarat High Court that requirement of reversal of credit on inputs used in the manufacture of finished goods destroyed in fire as incorporated under Sub-Rule (5C) of Rule 3 of CCR, 2004 effective from 07.09.2007 cannot be made retrospectively applicable. Therefore, the condition placed by the Ld. Commissioner for reversal of credit availed on inputs used in the manufacture of finished goods destroyed in fire on 16.08.2007 is unsustainable in law.
4. Per contra, Ld. AR for the Revenue submits that in view of the specific provision contained under Rule 21 of the Central Excise Rules, 2002 governing remission of duty, which says that remission could be allowed subject to the conditions which the Commissioner may impose, therefore, the direction for reversal of Cenvat credit on inputs used in the manufacture of finished goods destroyed in fire, by the Commissioner, is correct.
5. We find that the issue of reversal of credit on inputs contained in the finished goods destroyed in fire, where remission for payment of duty is allowed under Rule 21 of Central Excise Rules,2002 has been covered by the judgement of Honble Gujarat High Court in Intas Pharmaceuticals Ltds case (supra). The Honble Gujarat High Court has observed that the condition to reverse Cenvat credit on inputs used in the finished goods destroyed in fire being placed under the statute as Sub-Rule (5C) of Rule 3 of CCR, 2004 w.e.f. 07.09.2007, therefore, such a condition cannot be made applicable retrospectively. Thus, the condition of the Ld. Commissioners for reversal of credit for the goods destroyed in fire on 16.8.2007 is in conflict with the principle laid down by the Honble Gujarat High Court in Intas Pharmaceuticals Ltds case (supra), hence, cannot be sustained.
6. In the result, the impugned order is modified to the extent of setting aside the direction for reversal of Cenvat credit on inputs used in the manufacture of finished goods destroyed in fire. Appeal is allowed accordingly.
(Operative part of the order pronounced in the Court)
(Raju) (D. M. Misra)
Member (Technical) Member (Judicial)
G.Y.
3
Appeal No. E/777/2012