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TMI Blog2009 (4) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... n 11A of the Central Excise Act, 1944 (hereinafter referred as the Act) read with Rule 14 of the Cenvat Credit Rules, 2004 (hereinafter referred as the Cenvat Rules), cenvat duty of Rs. 5,37,573/- and Education Cess of Rs. 10,751/- on the stocks of 47824 kgs. of finished goods valued at Rs. 33,59,831/- should not be demanded and recovered under Section 11A of the Act and appropriate amount of interest should not be charged on the duty demanded under Section 11AB of the Act read with Rule 14 of Cenvat Rules and penalty should not be imposed under Section 11AC of the Act read with Rule 15 of Cenvat Rules and Rule 27 of Central Excise Rules, 2002; that the SCN, on the basis of which the above demands made, are that on 11-3-2006, due major fire accident in the appellant's factory at Late Parashuram, entire factory was destroyed and the appellant furnished the details of inputs, capital goods, work in progress and finished goods lying in stock and destroyed in the fire accident; that the appellant vide letter dated 15-5-2006 also submitted a copy of FIR and copy of Police Panchanama and the balance of raw materials and finished goods as on 28-2-2006; that subsequently, the appellant vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .L.T. 382]." 2. Being aggrieved by the above order, the appellant has come up with the present appeal along with stay petition, wherein the appellant, inter alia, contended as under :- (i) that in the early hours of 11-3-2006, the factors' had a fire accident and in that accident, entire raw materials, capital goods and packing material and stock of finished goods lying along with work in progress were burnt without leaving back any remnant of commercial value, except the metal drums/scrap of metals; (ii) that the appellant had taken all precautionary measures to avoid such type of unforeseen events but was helpless for the fire accident and on extinguishing of the fire on 11-3-2006, the appellant filed the FIR with the jurisdictional Police Authorities giving full details and copy of the same was faxed to the Divisional office; (iii) that since all the factory's belongings, stock of raw materials, capital goods installed and used were destroyed by fire accident, nothing was available to show and establish the factual stock/position of goods and the clearances effected up to 10-3-2006 were taken from Head Office and the quantity of finished goods lying and destroyed in the fire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is inclusive of duty) was taken and that on the said amount again duty was demanded which is not legally correct; (xi) that the details of reversal of duty of Rs. 4,71,393/- was submitted to the adjudicating authority vide reply to the SCN dated 1-6-2007 but the findings of para 26.4 are not correct; (xii) that they have not evaded duty and non-payment of duty occurred due to fire accident which was beyond their the control of human being and hence the motive/intention to evade duty was not established at any stage by the Revenue and hence no penalty was imposable. 3. PH was held on 28-4-2009 at 14.30 PM. Shri S. Sakpal, Consultant, duly authorized by the appellant appeared before me at 02.30 PM along with Shri Santosh More, Director of the appellant-company. 3.1 During the hearing, in addition to reiterating the submissions made in the appeal memorandum, he stressed the following points - (i) that the SCN was issued demanding duty based on the particulars furnished by the appellant wherein though the duty elements viz. cenvat duty and cess were shown separately, the SCN took gross value including duty element for demanding duty @ 16% which is not permissible in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2006 in RG23A Pt. II the appellant filed ER1 in the month of September, 2006. The main contention of the appellant is that the duty on raw materials, packing materials and finished goods was demanded based on the figures supplied by the appellant and the same was inclusive of duty; that secondly since no duty was payable on the finished goods lying as on 10-3-2006, which was destroyed on 11-3-2006, and the remission application was filed with the Commissioner, Central Excise, Pune-II, debit entry for Rs. 4,71,393/- made as directed by the Range Officer was to be allowed back; that since duty demand has arisen on account of fire accident, which is not under dispute, there cannot be any intention on the part of the appellant to evade duty and therefore, no penalty is imposable. 4.1 As regards the plea of the appellant that the value furnished by the appellant on which duty was demanded by the department, was inclusive of duty element, the Joint Commissioner has held that the appellant's plea cannot be accepted as they have not paid duty on the finished goods, etc. and also they have not produced any evidence showing the payment of duty on the raw materials, finished goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also. But the appellant pleaded before the Joint Commissioner in the form of documentary evidence that the amount was exclusive of duty element. This aspect also has been overlooked by the Joint Commissioner. 4.3 As regards reversal of duty of Rs. 4,71,393/- he held that the appellant had not given details of this reversal i.e. entry number and date and accordingly, he is unable to accept the reversal of the said amount requested by the appellant. He has further held that since reversal amount is less than Rs. 5 lakhs, he has held that the assessee (the appellant) to approach to the proper officer i.e. Deputy/Assistant Commissioner. Herein also the Joint Commissioner is wrong. It is on record that after fire accident, the appellant was called by the Range Officer during the month of September, 2006 and the appellant was directed to arrive the figures of finished goods as on 10-3-2006 and accordingly, he has filed ER1 returns. Since the appellant was already in distress mood, without knowing what to do, he has obeyed the Range Officer and accordingly, he reversed the cenvat credit of Rs. 4,71,393/- vide debit entry No. 654 dated 10-3-2006 in RG123A Pt. II and filed the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing materials and finished goods were available for assessment. Further it is not the case of the department that the appellant availed Cenvat credit paid on raw materials, packing materials and capital goods and was trying to utilize the same for the clearances of other products which are nothing to do with the raw materials, packing materials destroyed in the fire. In the above background, there should not have been any duty demand from the appellant. However, the above conclusion is only of my view and not decision in the instant appeal since I have already held that the appellant wants to pay/settle duty involved on the raw materials, packing materials and capital goods details of which were supplied to the department basing on which the present demand was raised. As regards reversal, I have already held that the same is out of my domain, since the eligibility of remission has to be considered by the Commissioner. As regards penalty, I have already held that the appellant is not to pay any penalty.
8. In view of the above facts and circumstances, I allow the appeal by setting aside the impugned order passed by the Joint Commissioner, Central Excise, Pune-II. X X X X Extracts X X X X X X X X Extracts X X X X
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