2015 (12) TMI 250 - AT - Central Excise

Loss and stock of the waste paper in a fire - whether indigenous goods or imported goods - Bexemption under notification No. 21/2008-Cus dated 1/3/2008 - demand of custom duty as well as denial of Cenvat Credit availed in respect of CVD - Held that - Applicants were given sufficient opportunity to justify their claim that goods lost in fire is indigenous goods. However, applicant neither submitted any record nor explained their claim before the adjudicating authority during the denovo adjudication. Moreover there was serious manipulation appearing on records that the applicants were maintaining two parallel Form IV register and the stock shown in both the register and entries of imported goods were also wrongly made. In the remand matter this Tribunal has categorically stated to follow the FIFO principle, however applicant has not done anything to comply with the direction of the Tribunal. In view of this position it is clear that the entire goods lost in fire is indeed imported material and when it is so, demand of entire custom duty, excise duty is sustainable in toto. - Decided against assessee.

Summary

Issues:
Stay applications for waiver of pre-deposit arising from Order-in-Original No. 13-14/2013/C dated 21/10/2013 passed by the Commissioner of Central Excise & Customs and Service Tax, Nagpur.

Analysis:
1. The appellant, engaged in manufacturing Kraft Paper, faced a demand of duty and penalty due to the destruction of waste paper in a fire incident. The department alleged that the destroyed material was imported, leading to demands of custom duty and denial of Cenvat Credit. The appellant contested, claiming the destroyed material was indigenous. After multiple proceedings, the Ld. Commissioner confirmed the demand. The Tribunal had remanded the matter earlier for verification based on FIFO principle, but the appellant failed to provide substantial evidence. The Ld. Adjudicating authority found discrepancies in the records and confirmed the demand. The appellant sought a stay on the pre-deposit.

2. The Tribunal noted the appellant's failure to comply with the earlier direction to verify the nature of the destroyed material using FIFO principle. Despite opportunities, the appellant did not substantiate their claim that the material was indigenous. Serious record manipulation was evident, with parallel Form IV registers maintained. The Tribunal concluded that the destroyed material was imported, upholding the duty demands. The appellant was directed to make a further pre-deposit to continue the appeal process.

3. The Tribunal emphasized the importance of following FIFO principle to ascertain the nature of the destroyed material accurately. The appellant's lack of cooperation and failure to provide necessary records led to the confirmation of duty demands. The Tribunal's decision to require additional pre-deposit was based on the appellant's non-compliance and inability to prove the indigenous nature of the destroyed goods. Compliance deadlines were set for the appellant to proceed with the appeal process.

This detailed analysis highlights the legal proceedings, the appellant's arguments, the Tribunal's directions, and the final decision regarding the duty demands and pre-deposit requirements in the case.