Custom, Excise & Service Tax Tribunal
M/S. J J Foams Pvt. Ltd vs Commissioner Of Central Excise on 19 September, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. 1299 of 2007-Ex (SM)
[Arising out of Order-In-Original No. 10/Commr/GZB/07 dated 6.02.2007 passed by Commissioner of Central Excise (Appeals) Ghaziabad]
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
NO
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
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Whether Their Lordships wish to see the fair copy of the Order?
Seen
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Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. J J Foams Pvt. Ltd. Appellants
Vs.
Commissioner of Central Excise Respondent
Ghaziabad Appearance:
Shri A L Malhotra, Advocate for the Appellants Shri M S Negi, AR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Date of Hearing : 30.06.2014 Date of decision : 19.09.2014 ORDER NO. FO/ 53749 /2014-Ex(SM) Per Archana Wadhwa (for the Bench):
The appellant is engaged in the manufacture of PU foam falling under Chapter 39. Fire broke in the appellants factory on 18.6.04. The intimation was given to the Deputy Commissioner on 18.604 itself. The fire station officer was also informed on the same very date and fire brigade was sent to the appellants factory. A report was also filed in the Thana Incharge, Ghaziabad. The appellants factory was visited by the Central Excise officer who conducted the survey and prepared a detailed chart showing the destruction of the inputs as also the final product. Inasmuch as the appellants had sent a part of their goods to their adjacent factory of M/s. Khandelwal Laminates Ltd. for conversion of the goods to semi finished goods and inasmuch as the fire also broke out in the said job worker factory destroying the semi finished goods.
2. The appellant reversed the Cenvat credit of Rs. 3,50,798/- involved on the inputs destroyed in fire and are not disputing such reversal and similarly duty already stand paid in respect of confiscated and redeemed goods to the tune of Rs. 16,451/- is also not disputed by same.
3. The appellants subsequently filed the remission application for Rs.11,90,775/- in respect of goods destroyed in their factory as also the one destroyed in the job workers factory. The Commissioner has rejected the remission application on the ground that appellants have not been able to show that they have taken all reasonable care and due precautions to prevent occurrence of fire in their factory. Further on non-receipt of the goods lying in the job workers factory, he has observed that Rule 21 does not apply to the job workers factory and as such, the appellant is required to pay duty in respect of goods destroyed at the job workers factory which could not be brought back by them to the job workers factory in terms of provisions of Rule 16B of Central Excise Rules, 2002.
4. After hearing both sides, I find that Revenue is not disputing the fact of occurrence of fire and resultant destruction of the goods either in the appellants factory or in the job workers factory. As a result, mere observation of the Commissioner that no reasonable steps were taken to avoid the fire cannot be appreciated inasmuch as nobody likes to invite fire resulting in destruction and loss of stock.
As regards the destruction of the goods in the job workers factory admittedly the receipted goods were work in progress and were not the finished goods. Though I am of the view that such semi finished goods are also entitled to the remission of duty but even if the Commissioners stand is accepted, no duty liability would arise in respect of semi-finished goods inasmuch as the same had not attained final stage so as to be liable to duty of excise. It has to be kept in mind that the proceedings before the Commissioner were for remission of duty and not for demand of duty in respect of inputs sent to the job workers factory and non-receipt back in terms of provisions of Rule 16 B of the Central Excise Rules, 2002. As such, I find no merits in the impugned order of Commissioner which is set aside and the appeal is allowed with consequential relief to the appellant.
(Pronounced in the open court on )
( Archana Wadhwa ) Member(Judicial)
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