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TMI Blog2023 (7) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... PUR [ 2021 (12) TMI 238 - CESTAT MUMBAI] wherein the division bench of this Tribunal after considering various decisions of the Tribunal on this issue has held it is quite evident that Rule 3 (5B) is applicable only in the situation were the inputs or capital goods have become obsolete and written off. It is not applicable in the situations where the inputs and semi finished goods are destroyed in fire accident. Demand of excess refund of Rs. 4,34,573/- - HELD THAT:- The show cause notice in this regard is totally vague and does not mention as to when, by whom and vide which order-in-original refund has been granted and in which month. Further, the appellant has categorically stated that no such refund was taken for the month of February 2008 as alleged by the department. Hence, there is no question of excess refund which is to be paid to the department. This issue is also decided against the department. The impugned order is not sustainable in law - Appeal allowed. - Excise Appeal No. 3557 Of 2010 - A/60213/2023 - Dated:- 21-7-2023 - Mr. S. S. GARG, MEMBER (JUDICIAL) AND Mr. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri A. S. Gill, Advocate for the Appellant M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued to the appellants for - (a) Recovery of Cenvat credit amounting to Rs.24,76,855/- along with interest in respect of the cenvated inputs in process, which were lost in fire and along with interest on it at the applicable rate and appropriation of an amount of Rs.47,626/- already paid towards this demand; (b) Recovery of excess cash refund of Rs.4,34,573/- under Notification No.56/2002-CE dated 14.11.2002 during month of Feb., 2008 along with interest at the applicable rate under Section 11 AB ibid and; (c) Imposition of penalty on the appellant under Rule 15 of the Cenvat Credit Rules, 2004 read with Rule 27 of the Central Excise Rules, 2002. 3. The above show cause notice was adjudicated by the Addl. Commissioner vide order-in-original dated 26.02.2010 by which the above mentioned demands of Cenvat credit and duty were confirmed along with interest and besides this while penalty of Rs.24,76,855/- was imposed on the appellant under Rule 15 of the Cenvat Credit Rules, 2004, penalty of Rs. 5,000/- was imposed on them under Rule 27 of the Central Excise Rules, 2002. 4. Aggrieved by the Order-in-Original, the appellant filed appeal before the Commissioner (Appeals) wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner (Appeals). 8. As far as the demand of excess refund of Rs. 4,34,573/- under Notification No. 56/2002-CE dated 14.11.2002 is concerned, the Ld. Counsel submitted that this demand is without any basis and the show cause notice is totally vague and nowhere mentioned in the show cause notice as to in which month excess refund was taken or granted and is based on ill-founded assumptions and presumptions. He further submitted that refund under Notification No. 56/2002-CE is always subject to sanction by Jurisdictional Assistant Commissioner/Deputy Commissioner. Thereafter the ld. Counsel has taken us through the Notification no. 56/2002-CE dated 14.11.2002 to highlight the procedure for grant of refund. He further submitted that the show cause notice is silent as to when, by whom and by which order-in-original refund was granted and in which month. Ld. Counsel further submitted that in fact no refund was taken for the month of February 2008 and therefore there was no question of excess refund. In support, the Ld. Counsel relied upon the following decisions:- M/s Cipy Polyurethanes Pvt. Ltd. vs. CCE, Kolhapur-2021 (07) LCX 0315 M/s Kanoria Chemicals Industrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly used in the manufacture of final products or the provision of output services, the manufacturer or the output service provider, as the case may be shall be entitled to take the credit of the amount equivalent to the CENVAT credit paid earlier subject to other provisions of these rules. (5C) Where on any goods manufactured or produced by an assessee, the payment of duty is ordered to be remitted under rule 21 of the Central Excise Rules, 2002, the CENVAT credit taken on the inputs used in the manufacture or production of said goods shall be reversed. Explanation 1.- The amount payable under sub-rules (5), (5A), (5B) and (5C), unless specified otherwise, shall be paid by the manufacturer of goods or the provider of output service by debiting the CENVAT credit or otherwise on or before the 5th day of the following month except for the month of March, where such payment shall be made on or before the 31st day of the month of March. Explanation 2.- If the manufacturer of goods or the provider of output service fails to pay the amount payable under sub-rules (5), (5A), (5B) and (5C), it shall be recovered, in the manner as provided in rule 14, for recovery of CEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty paid by them on account of reversal of Cenvat credit availed on inputs which were used in work in progress/semi-finished goods. Admittedly, the inputs on which Cenvat credit was availed by the appellant were used in manufacture of final goods. Therefore, the Cenvat credit cannot be denied to the appellant, moreover, the work in progress lost in fire. Therefore, appellant is not entitled for claim of remission of duty but the appellant cannot be asked to reverse Cenvat credit. It is a fact on record that the appellant has not written off the value of semi-finished goods/work in progress. In that circumstance, Rule 3(5B) of the CCR, 2004 is not applicable in this case. Further, I have gone through to the provisional Rule 3(5C) of the Cenvat Credit Rules, 2004 which are not applicable to the facts of this case as appellant has not filed any claim of remission of duty under Rule 21 of the Central Excise Rules, 2002. Therefore, the impugned order is not sustainable in the eyes of law. Consequently, the same is set aside and the appeal is allowed with consequential relief, if any. 4.10 From the above decision it is quite evident that Rule 3 (5B) is applicable only in the situa ..... 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