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TMI Blog2015 (3) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,97,033/- . The fact of the case is that the appellant vide their letter dated 25/8/2006 informed the Central Excise department that input viz. Sponge Iron has caught fire on 2/8/2006 subsequently they lodged insurance claim with the New India Insurance Co. Ltd. for loss of 700 MT of Sponge Iron burnt which is valued of Rs. 88 lakhs. According to the appellant the assessable value of 700 MT Sponge Iron comes to Rs. 65,80,000/-. On certificate of the Insurance Company Surveyor M/s. SIB Associates it was observed that burnt Sponge Iron quantity is 547.982 MT on which Cenvat credit comes to Rs. 6,43,615/- which was reversed by appellant vide TR 6 challan NO. 20 dated 16/3/2007. The show cause notice was issued where in it was alleged that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d same should be upheld. 4. I have carefully considered the submission made by Ld. A.R. and perused the record. 5. The adjudicating authority while disposing of the show cause notice adjudicated the matter on the following findigs. Findings: I have carefully gone through the case records and the submissions made by the said assessee, in this regard. The issue to decide before me is (a) whether the loss quantified by the Department is correct of otherwise; (b) Whether the rate of damaged goods ascertained by the Department is correct of otherwise; (c) Whether penalty under Rule 15(1) of CENVAT Credit Rules, 2004, is imposable on the said assessee or otherwise; (d) Whether interest of the remaining amount is recoverable from the said a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, that the fire took place on the 1 st of Aug. 2008, at eh premises of the respondent. The respondent have informed about the incident of fire inside their factory to their insurance company at Mumbai on the 2 nd Aug 2008. the respondent have written to their insurers that their Raw material Viz. Sponge Iron quantifying to 700 MT has perished in fire, whose estimated value is Rs. 88/- lakhs. 8. The respondent have also submitted the surveyors viz. SIB & Associates report which concludes through sketches and diagrams, that the total loss of raw material viz. Sponge Iron, due to fire is 547.982 Metric Tones. 9. The respondent have informed the Department about the incident of fire only after 25 days, which has been taken place at their pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise duty is not legally tenable. The respondent is thus liable to reverse the differential Cenvat credit amounting to Rs. 411049/- in addition to the amount of Rs. 6,43,615/- which is already debited by them. 12. The appeal by the Department to imposed penalty upon the respondents under the provision of Rule 15(1) of the Cenvat Credit Rules 2004 appears to be legally sustainable. The fire took place in the premises of the respondents as on 1 st Aug. 2008. the respondents have paid the Central Excise duty including Ed. Cess amounting to Rs. 643615/- vide their TR-6 Challan No, 20 dated 16-03-2007. Paying the duty after a lapse of eight months tantamount to utilization of inadmissible Cenvat Credit availed on the raw material Viz. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is 700 MT then there is no reason why the insurance surveyor reduced the quantity from 700 MT to 547.982 MT for the purpose of insurance. It shows that actual quantity of loss is 547.982 MT and remaining material is very much available in the factory of the appellant. It is observed that Central Excise department has not conducted any physical verification in order to justify that the actual loss is 700 MT and not 547.982 MT. On careful consideration of the findings given by the both the lower authorities, I find that adjudicating authority has correctly held that the quantity of 547.982 MT is the actual lost quantity and I do not agree with findings of the Ld. Commissioner (Appeals) that once the appellant declared 700 MT there is no rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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