2014 (8) TMI 325 - AT - Central Excise

Rejection of remission application - ground adduced for rejection of remission application is that the godown of the appellant situated in 1 st floor of the appellant s premises was not part of the registered premises - Held that - The remission of duty arises when duty is payable and when the goods gets destroyed or become unfit for consumption. In the present case, there is no dispute that the appellant has not paid any duty on the finished goods stored in the godown in the 1 st floor and therefore, they are rightly entitled for the remission of the duty payable. From the records, it is seen that as early as in September 2003 the appellant had intimated to the department that their godown is in the 1 st floor and the department had never objected to the storage of non-duty paid finished goods in the said godown. Even on 11 April 2005 when the department wrote to the appellant, they were only asked to reverse the Cenvat Credit taken on the inputs contained in the finished goods. There was no demand of duty on the finished goods stored in the godown, which also shows that the department has always been treating the godown in the 1 st floor as part of the approved premises. In these circumstances, the stand taken by the department for denial of remission stating that the godown in the 1 st floor was not part of the approved premises is contrary to the facts obtaining on records. Therefore, the appellant is rightly entitled for the remission of duty of the excise duty payable on the finished goods stored in the godown - Following decision of Sportking India Ltd. (2002 (7) TMI 136 - CEGAT, NEW DELHI) - Decided in favour of assessee.

Summary

Issues:
- Denial of remission of Central Excise duty on destroyed cotton grey fabrics due to premises not being part of registered premises.

Analysis:
1. The appeal challenged the Order-in-Original denying remission of Central Excise duty on cotton grey fabrics destroyed in a fire. The appellant claimed the godown on the first floor as part of their registered premises, while the department argued it was not registered, thus remission was not applicable.

2. The appellant, a new assessee under Excise levy in 2003, registered Gala No. 4 on the ground floor but later informed the department about the godown on the first floor. The appellant stored finished goods there, cleared them on duty payment, and informed the department about the fire incident and goods destroyed. The department asked for Cenvat Credit reversal but did not demand duty on the finished goods earlier stored in the godown.

3. The appellant contended that the department never objected to storing goods in the godown, treating it as part of the factory. Citing a Tribunal decision, the appellant argued for remission approval. The Revenue argued the godown was not registered, hence remission was not applicable.

4. The Tribunal noted duty remission applies when duty is payable on destroyed goods, which was not paid by the appellant. The department's lack of objection to storing goods in the godown and not demanding duty earlier indicated its acceptance of the godown as part of the approved premises. Therefore, the appellant was entitled to remission, and the appeal was allowed with consequential relief as per the law.