2014 (7) TMI 69 - AT - Central Excise

Remission of duty - Loss due to fire which was caused due to short circuit - loss of inputs which has been used in manufacturing process - remission denied due to insurance claim - Held that - Considering the fact that the initial refund claim was filed without documents, and same was returned on account of deficiency in documents. Later on after obtaining the insurance claim from the insurance company, the respondent filed claim of remission of duty with supporting documents and to know how much amount of duty is required to be remitted. In these circumstances, the Commissioner has rightly entertained the claim of remission of duty and same shall not amount to review of his own order. Therefore, the ground that Commissioner has no power to review his own order is not sustainable. Further, I find that this Tribunal in Urmi Chemicals vs. CCE 2014 (6) TMI 785 - CESTAT MUMBAI has held that if inputs has gone in the manufacturing process which has been lost in fire/flood are entitled for remission of duty. Therefore, I hold that the Commissioner has not committed any error in holding that the respondent are entitled for remission of duty on inputs gone in the manufacturing process which has been lost in fire - Decided against Revenue.

Summary

Issues:
Appeal against remission of duty for inputs lost in fire allowed by Commissioner, Commissioner's power to review own order, eligibility for remission of duty on inputs lost in manufacturing process.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI pertained to the remission of duty for inputs lost in a fire incident, allowed by the Commissioner. The case involved the initial claim for remission of duty filed without proper documents, which was returned to the respondent due to deficiencies. Subsequently, the respondent submitted a revised claim with supporting documents, including the insurance claim amount. The primary grounds of appeal by the Revenue were twofold: firstly, the Commissioner's alleged lack of authority to review his own order, and secondly, the contention that remission of duty for inputs lost in the manufacturing process should be denied.

Upon hearing both sides, the Tribunal considered the circumstances surrounding the case. It noted that the Commissioner had appropriately entertained the revised claim for remission of duty after the necessary supporting documents were provided, including details of the insurance claim. The Tribunal rejected the argument that this action amounted to a review of the Commissioner's earlier order, emphasizing that the Commissioner had not erred in allowing the remission of duty for inputs lost in the fire incident during the manufacturing process. The Tribunal referenced a previous case, Urmi Chemicals vs. CCE, to support the entitlement of remission of duty for inputs lost in fire or flood situations.

Consequently, the Tribunal found no fault with the impugned order and upheld the decision made by the Commissioner. The appeal filed by the Revenue was dismissed, affirming the respondent's eligibility for remission of duty on inputs lost in the manufacturing process due to the fire incident.