2003 (11) TMI 485 - AT - Central Excise

Summary

Issues:
1. Availability of benefit under Notification No. 36/96-Cus. for goods destroyed in fire.

Analysis:
The appeal in question revolved around whether M/s. Samtel Colour Ltd. was entitled to the benefit of Notification No. 36/96-Cus. concerning goods destroyed in a fire incident. The Appellant argued that the demand of duty was imposed as the imported goods, benefiting from the said notification, were not utilized in the manufacturing process due to a fire accident. The Assistant Commissioner had previously accepted that the inputs were indeed utilized in manufacturing excisable goods, leading to the dropping of the disallowance of Modvat credit. The Appellant contended that since the inputs were used in manufacturing, the duty demand on the imported goods should not be upheld.

On the other hand, the Respondent argued that as per the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996, the Appellant must fulfill the conditions to avail of the concessional rate of duty. Since the goods were not used in manufacturing excisable goods, the Respondent asserted that the Appellant was not eligible for the concessional rate of Customs duty.

After considering both arguments, the Tribunal noted that the Revenue did not dispute that the imported goods were indeed utilized in the manufacture of excisable goods. The Tribunal emphasized that once inputs were used in the manufacturing process, it could not be claimed that they were not utilized in manufacturing excisable goods due to subsequent damage from a fire incident. Citing the Assistant Commissioner's findings regarding the treatment of goods damaged during the manufacturing process as a manufacturing loss, the Tribunal concluded that the same rationale applied to the imported goods. Consequently, the Tribunal allowed the appeal filed by the Appellants, ruling in their favor regarding the duty demand on the imported goods benefiting from Notification No. 36/96-Cus.