2023 (2) TMI 5 - AT - Central Excise

Rejection of claim of remission of duty - rejection on the ground that appellant have not only claimed the tax amount from the insurance but also the excise duty for which the remission of duty has been claimed - HELD THAT - It is found from the records that the appellant had neither paid any duty on the finished goods nor made any claim in respect of any duty of excise on the finished goods. Therefore, the entire base of the Learned Commissioner for denial of the remission claim is based on the incorrect fact. Since the appellant have admittedly reversed the entire credit on the inputs contained in finished goods, work in progress and input as such, the same being the stock of the raw material and the appellant have correctly made the claim. Since the detailed chart showing the bifurcation was not before the adjudicating authority, in the interest of justice it is appropriate that the adjudicating authority should reconsider the matter - The other appeal bearing No. E/12091/2017 being consequent to the order of the commissioner rejecting the remission also needs to be reconsidered. Appeals are allowed by way of remand to the adjudicating authorities to pass fresh orders by the respective adjudicating authority.

Summary

Issues:
Claim of remission of duty based on insurance claim; Correct interpretation of excise duty on raw material vs. finished goods; Rejection of remission claim by Commissioner (Appeals); Appeal against Order-In-Appeal confirming demand of excise duty; Consideration of detailed insurance claim bifurcation; Reversal of credit on inputs; Reconsideration of remission claim and associated appeal.

Analysis:

The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved an appeal against the rejection of a remission claim of duty amounting to Rs 1,14,53,671. The appellant had claimed remission of duty for excise duty on raw materials used in the manufacturing process, not on the finished goods. The Commissioner (Appeals) rejected the remission claim based on the incorrect understanding that the appellant claimed excise duty on both the tax amount and the insurance. The subsequent appeal was filed against the Order-In-Appeal upholding the demand of excise duty attributed to the goods for which remission was sought, leading to the current appeal.

The appellant's counsel argued that the Commissioner misunderstood the insurance claim, emphasizing that the excise duty mentioned in the claim pertained to raw materials destroyed in a fire, not the finished goods. Citing relevant judgments, the counsel contended that the remission claim was valid. Supporting documents, including a detailed insurance claim bifurcation, were submitted to clarify that only the duty on raw materials was included in the claim, not on finished goods.

The Revenue's representative reiterated the findings of the impugned order, maintaining the denial of the remission claim. However, the Tribunal carefully examined the submissions and records. It was established that the appellant did not pay duty on finished goods or claim excise duty on them. The Tribunal found that the denial of the remission claim by the Commissioner was based on incorrect facts. Considering the detailed worksheet and surveyor's letter, which clarified the duty on raw materials, the Tribunal concluded that the remission claim was valid. As the detailed bifurcation was not before the adjudicating authority, the matter was remanded for reconsideration. Both impugned orders were set aside, and the appeals were allowed for fresh orders by the respective authorities.

In conclusion, the judgment highlighted the importance of correctly interpreting excise duty on raw materials versus finished goods in remission claims, emphasizing the necessity of proper documentation and clarification to support such claims before the adjudicating authorities.