2015 (10) TMI 1295 - HC - Central Excise

Remission of duty - CENVAT Credit - Held that - So far as the first question is concerned, the Full Bench of this Court in Commissioner of Central Excise and Customs, Ahmedabad-II Vs Intas Pharmaceuticals Limited, reported in 2013 (4) TMI 532 - GUJARAT HIGH COURT has held regarding remission of duty on destruction of final product and credit taken on inputs used in manufacture of such final product. The remission application was filed on 3.10.2005, whereas Rule 3(5-C) came into force on or after 7.9.2007. Therefore, benefit was available to the respondent assessee to claim the benefit of Cenvat Credit as the goods were destrobed in fire - Decided against Revenue.

Summary

Issues involved:
1. Interpretation of rules regarding remission of duty under Cenvat Excise Rules, 2002.
2. Requirement of reversal of modvat credit despite CBEC's Circular dated 1.10.2004.
3. Determination of unavoidable events for consideration of remission under Rule 21 of the Central Excise Rules, 2002.

Analysis:
1. The judgment addresses the first issue by referring to a Full Bench decision in Commissioner of Central Excise and Customs, Ahmedabad-II Vs Intas Pharmaceuticals Limited, which clarified the remission of duty on the destruction of final product and credit taken on inputs used in manufacturing. The court notes that the remission application was filed before the relevant rule came into force, allowing the respondent to claim the benefit of Cenvat Credit as the goods were destroyed in a fire. The court decides to answer all three questions together as they are interconnected and rules in favor of the assessee, dismissing the appeal filed by the revenue.

2. Regarding the second issue, the court does not delve into specific details but concludes that the Tribunal erred in holding that no reversal of modvat credit was required despite the Circular dated 1.10.2004. This implies that the court found the Tribunal's decision to be incorrect on this matter.

3. Lastly, the court tackles the issue of determining unavoidable events for consideration of remission under Rule 21 of the Central Excise Rules, 2002. The court finds that the repeated occurrences of fire due to the lack of installation of fire safety measures could be considered an unavoidable event, allowing for the consideration of an application for remission. By connecting this issue with the previous ones, the court rules in favor of the assessee and against the revenue, ultimately dismissing the appeal.

In conclusion, the judgment provides a comprehensive analysis of the issues related to remission of duty under the Cenvat Excise Rules, reversal of modvat credit, and the definition of unavoidable events for remission consideration. It relies on previous legal interpretations and interconnects the issues to deliver a unified decision in favor of the assessee.