9911796707
TMI Blog2014 (11) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... ling under Chapter Heading No. 40 of the Central Excise Tariff Act, 1985. On account of fire accident on 5-5-2006 in the 'post cutting area' of the factory, the work in progress stocks were burnt and rendered unfit for usage, which was informed to the department in writing on the same day. The assessee also lodged a claim with the insurance company. It is further stated that the assessee had availed Cenvat credit on the raw materials, which were to be used for production of Oil Seals. A show cause notice dated 28-12-2006 was issued calling upon the asseessee to explain as to why the Cenvat credit availed on raw materials, which was destroyed in fire should not be demanded in terms of Rule 14 of the Cenvat Credit Rules, 2004 r/w Section 11A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods were destroyed in the fire accident during the course of manufacturing. However, the adjudicating authority held that the assessee is liable to reverse the credit on inputs contained in the work-in-progress, which were destroyed in fire, by placing reliance on the decision of the Tribunal, in the case of M/s. Tambraparani Coatings v. Commissioner of Central Excise, Pondicherry [2006 (193) E.L.T. 80 (Tri. - Chen.)]. As regards the order of the Tribunal in the case of Indchem Electronics (cited supra), the First Appellate Authority held that the Special Leave Petition filed by the Department as against the said order was dismissed by a non-speaking order and therefore that would not be binding. On the above ground, the appeal came to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the said case, the assessee was manufacturer of electronic automatic exchanges and there was a fire accident in the factory. As a result of which, certain quantity of inputs were destroyed. The duty involved on such input was calculated. However, the assessee had taken Modvat credit of the duty involved on such goods and the same also has been utilized for payment of duty on clearance of the finished products. In the said case, the inputs in question were not actually used in the manufacture of final products as the same were destroyed in fire accident and as Rule 57A of the Central Excise Rules, Modvat credit is allowable only when the inputs are used in or in relation to the manufacture of final product. Therefore, it was held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were actually issued and thereafter destroyed in fire accident, is not disputed by the Department. Therefore, it cannot be stated that it is a non-speaking order. In any event the Commissioner orders are subject to scrutiny by the Tribunal and is bound by the order passed by the Tribunal and it is wholly untenable on the part of the Commissioner to contend that the decision of the Tribunal would not bind the Commissioner. Therefore, the finding of the Commissioner to that extent is absolutely perverse. 9. Coming to the facts of this case, it is not in dispute that the inputs on which the Cenvat credit was availed were destroyed when the work was in progress. Once this fact is not disputed, then the assessee cannot be called upon to r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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