2010 (7) TMI 872 - AT - Central Excise

Summary

Issues:
1. Rejection of application for remission of duty on inputs in Work in Progress (WIP) under Rule 21 of Central Excise Rules of 2002.

Analysis:
The judgment deals with the appeal filed against the rejection of the appellant's application for remission of duty on inputs in Work in Progress (WIP) under Rule 21 of Central Excise Rules of 2002. The appellant sought remission of duty amounting to Rs. 7,60,309/-, which was denied by the ld. Commissioner citing the inapplicability of Rule 21 to goods not fully finished, such as inputs in WIP. The judgment highlights that all proceedings, including the application for remission, were based on a wrong premise as Rule 21 only provides for remission in cases of goods lost or destroyed by specific causes, excluding inputs in WIP. The Commissioner's order, while addressing various aspects, failed to consider the crucial issue of the applicability of Rule 21 to the case at hand.

The judgment emphasizes that the recovery of Cenvat credit or refund/re-credit is not under dispute in this case. Even if the Order-in-Original (O-I-O) is upheld, it would not empower the department to recover Cenvat credit, which is not the subject matter of the appeal. The judgment clarifies that upholding the O-I-O would be inconsequential as it would not grant any right to the department for recovering Cenvat credit. Similarly, if the appeal is allowed, it would not automatically absolve the appellant of non-payment of Cenvat credit if proceedings have already been initiated or are likely to be initiated separately. The judgment concludes that the application for remission, the O-I-O, and the appeal are not maintainable in this case. In the interest of justice, all three have been dismissed as not maintainable.

In summary, the judgment underscores the incorrect premise on which the application for remission was based, the failure to address the specific issue of Rule 21's inapplicability to inputs in WIP in the Commissioner's order, and the consequential dismissal of the application, O-I-O, and appeal as not maintainable due to the absence of any impact on Cenvat credit recovery or refund/re-credit in the case.