2009 (6) TMI 869 - AT - Central Excise

Summary

Issues involved: Appeal against OIO No. 2/2007-C.E. for remission of duty and Education Cess due to destruction of inputs in a fire accident during job work procedure.

Summary:

Issue 1: Destruction of inputs during job work procedure
- The appellants sent inputs for conversion into final products to another unit under job work procedure.
- A fire accident occurred in the job workers premises, destroying the materials.
- Appellants sought remission of duty and Education Cess, which was initially rejected.
- Tribunal remanded the matter back for adjudication following principles of natural justice.
- Adjudicating authority again rejected the remission application, ordering recovery of the amount.
- Appellants appealed against this decision.

Issue 2: Legal arguments and precedents
- Appellant argued that the inputs were destroyed in the fire accident, and finished goods did not come into existence.
- Cited Tribunal's decision in a similar case and Supreme Court's dismissal of the department's appeal.
- Mentioned other Tribunal decisions supporting their case.
- JCDR argued that Cenvat principle requires inputs to be used for manufacturing finished goods.
- Referred to a Tribunal decision in a similar case to support their argument.

Judgment:
- The manufacturing process was incomplete, and no new products emerged after the inputs were issued.
- Tribunal's decision in a similar case was considered binding, as it was decided by a division Bench.
- Tribunal found in favor of the appellant, setting aside the impugned order and allowing the appeal with consequential relief.
- The impugned order rejecting the remission application was deemed incorrect and overturned.