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TMI Blog2013 (6) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... 11A(1) cannot be invoked. Cenvat credit on glass bottles that are damaged or broken is not admissible. Even remission of duty before removal on goods lost or destroyed by natural causes or unavoidable accident if claimed by the assessee they have to reverse the Cenvat credit taken on inputs used in the said goods as per the Circular No. 800/33/2004-Cx., dated 1-10-2004. In view of the above instructions of Government, the assessee is not entitled to avail the credit on broken or damaged glass bottles/pet bottles at whatever stage they lie in the factory. - Matter remanded back - Decided partly in favour of assessee. - F. No. 195/585/11-RA - Order No. 517/2013-CX - Dated:- 4-6-2013 - Shri D.P. Singh, Joint Secretary ORDER This revision application is filed by the M/s. Pearl Beverages Ltd., Guntur against the Orders-in-Appeal No. 9/2011 (G)-C.E. Try-II, dated 11-5-2011 passed by Commissioner of Central Excise (Appeals), Chennai with respect to Order-in-Original passed by the Deputy Commissioner, Central Excise, Chennai. 2. Brief facts of the case are that the applicants are the manufacturers of aerated waters. The applicants were issued show cause notice on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qual penalty under Section 11AC of Central Excise Act, 1944 and Rule 15(1) and (2) of Cenvat Credit Rules, 2004 is not imposable as well established by the law. This has been pronounced by the Hon ble Supreme Court in the case of M/s. Rainbow Industries v. CCE - 1994 (74) E.L.T. 3 (S.C.). Same view has been followed in Tamil Nadu Housing Board v. CCE - 1994 (74) E.L.T. 9 (S.C.). In this case it was held that the powers to extend period from one year to 5 years are exceptional powers and have to be construed strictly. It was held that both fraud, collusion, etc., and intention to evade duty must concern. 4.5 In a similar type of case, the Government of India, in a revision application filed by M/s. Hindustan Coca Cola Beverages P. Ltd., A.P, has allowed the applicant s appeal vide order No. 197-199/09-CX., dated 27-7-2009, issued under F. No. 195/52-53-54/07/RA-CX. 5. Personal hearing was scheduled in this case on 14-12-2012. Applicant vide letters dated 6-12-2012 requested for adjournment of hearing and further prayed to fix hearing after 10-1-2013. Accordingly second hearing was fixed on 22-2-2013. But applicant again vide letter dated 15-2-2013 made a request for adjournmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount specified in the notice; (b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of, - (i) his own ascertainment of such duty; or (ii) duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under Section 11AA. 8.2 From perusal of above provision, it is clear that the extended period can be invoked only for reason of collusion, fraud, misstatement or suppression of fact with an intention to evade duty. In this case the applicant has undisputedly declared/mentioned breakage of bottles in their RG-I register and ER-I monthly returns. They further stated that many audit parties of Central Excise department conducted audit from 2004 to 2009 of their record and nobody pointed out any evasion by way of non-reversal of Cenvat credit as alleged by the department in this case. Under such circumstances, Government finds that when the breakage of bottle by applicant has been declared in their excise record and their verification by such records by various excise audit teams is undisputed, there can be no reason to allege collusion, fraud, misdeclaration or suppression o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion inconsistent with the same has no relevance. As per the provisions of Rule 21 of Central Excise Rules, 2002, remission of duty before removal can be claimed on any goods lost or destroyed by natural causes or unavoidable accident claimed by manufacturer to be unfit for consumption or marketing. The said remission is granted subject to the condition of reversal of Cenvat credit taken on inputs used in the final product, as per the Circular No. 800/33/2004-CX., dated 1-10-2004 [2004 (172) E.L.T. 723]. Rule 3(5C) was also inserted in Cenvat Credit Rules, 2004, w.e.f 7-9-2007, to specifically provide for the same. Further; as per Rule 3(5B) of Cenvat Credit Rules, 2004, if the value of any input is written off, the cenvat availed on the same is required to be reversed. Therefore, if the final product (i.e. bottled beverage) is broken/destroyed then remission can be claimed and if the bottle (input) is written off by the assessee as destroyed, the same is required to be dealt with as per the provisions of Rule 3(5B) of Cenvat Credit Rules, 2004. In view of the above Board s Circular which clarifies the situation it is clear that Cenvat credit on glass bottles that are damaged or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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