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TMI Blog2024 (5) TMIX X X X Extracts X X X X X X X X Extracts X X X X ..... rules only those inputs which are used in the manufacture of final products are eligible for cenvat credit. With regard to capital goods also, one needs to verify whether they were put to use or destroyed before the same was used in the manufacture of the final products. If the capital goods were not used then the question of extending the benefit of cenvat credit does not arise. In the case of COMMISSIONER OF C. EX., BANGALORE VERSUS TATA ADVANCED MATERIALS LTD. [ 2011 (4) TMI 1124 - KARNATAKA HIGH COURT] , this was a case where the capital goods were used in the manufacture of the final products for three long years and later, these capital goods were destroyed in the fire as seen from the observations of the Hon ble High Court of Karnataka. The facts cannot be compared with the instant case where the goods were not put to use at all, hence not applicable. In the case of M/S VFC INDUSTRIES PVT. LTD. VERSUS COMMISSIONER OF C. EX. S. TAX, VADODARA [ 2016 (9) TMI 1020 - CESTAT AHMEDABAD] , the Tribunal has categorically held that inputs lying in stock which were not put to use and which were not used in the manufacture of final products the benefit of cenvat credit cannot be extende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fire accident and the details came to the notice of the department only through the audit party through their audit note dated 21.05.2009 that the appellant had not reversed the credit in spite of receiving the insurance amount. The impugned order also notes that the notice dated 14.05.2010 is well within the time period of 5 years under provision to Section 11A as relevant date in which the wrongly availed cenvat credit had to be reversed and that was September 2006. And since no claim of remission was made, the question of giving the benefit of remission of duty does not arise, accordingly, the impugned order was issued confirming a sum of Rs. 59,04,879/- the credit to be reversed along with appropriate interest under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944. The Commissioner also imposed equivalent amount of penalty under Section 11AC in view of the decision by the apex court in the case of Union of India versus Dharmendra Textile Processes reported in 2008 (231) ELT 3 (S.C). 2. The learned counsel for the appellants made the following submissions: (i) The Appellant is engaged in manufacture of Rechargeable Lanterns; Sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this plea, the Appellant place reliance on the following decisions, - CCE v. Indchem Electronics, 2003 (151) ELT 393 (Tri-Che.) maintained by Honorable Supreme Court as reported in 2003 (157) ELT A206 (SC). Sabers Organics Gujarat Ltd v. CCE, 2009 (236) ELT 281 (Tri-Ahmd.). Dishman Pharm Chemicals Ltd v. CCE, 2006 (206) ELT 254 (Tri-Mum.). Grasim Industries Ltd v. CCE, 2007 (208) ELT 336 (Tri-LB). VFC Industries Pvt Ltd v. CCE, 2017 (352) ELT 507 (Tri-Ahmd.). CCE v. Asian Paints India Ltd, 2015 (319) ELT 253 (Bom). CCE v. Fenner India Limited, 2014 (307) ELT 516 (Mad.). Aurobindo Pharma Ltd v. CCE, 2009 (247) ELT 820 (Tri-Bang.). Rako Mercantile Traders v. CCE, 2014 (307) ELT 602 (Tri-Del.). CCE v. Biopac India Corporation Ltd, 2010 (258) ELT 56 (Guj.). (iii) It is further submitted that the insurance claim received by the Appellant in respect of loss of goods does not include the element of central excise duty or cenvat credit. This aspect has not been appreciated in perspective. The Appellant place reliance on the following decisions, - CCE v. Tata Advanced Materials Limited, 2011 (271) ELT 62 (Kar.). Arvind International Limited v. CCE, 2012 (282) ELT 232 (Tri-Del.). Sheltron I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment. Since the destruction of goods in the fire accident was not provided to the department, the actual date of knowledge based on the insurance claim came to be known only in November 2008 and thereafter, based on the audit note, show-cause notice was issued to the appellant Therefore, the appellant cannot claim that the notice was time barred because the notice was well within the specified time limit from the date of knowledge to the department based on the audit note. 4. Heard both sides. The issue to be resolved is whether the cenvat credit availed on inputs and capital goods which were claimed to have been destroyed in fire at the job workers premises are recoverable from the appellant. The undisputed facts are that there was a fire accident at the job workers premises of the appellant and this was intimated to the department on 18/9/2006 without providing any details of the destruction either of the inputs or of the capital goods. In spite of two letters written by the Revenue, the appellant had not responded to these letters and neither had claimed remission of duty for the goods that were destroyed in the fire. From the insurance claim, it is noticed that the initial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Further, there was also no allegation that there was any diversion of the goods elsewhere. In view of our discussion above, we are of the considered opinion that the Commissioner (Appeals) has come to a correct conclusion after analysing the evidence on record, that there was no warrant to reverse the input credit taken in this case and we do not find any reason to interfere with the order passed by the lower appellate authority. Accordingly, the Revenue appeal is dismissed. 7. In the case of CCE v. Tata Advanced Materials Limited, 2011 (271) ELT 62 (Kar.), this was a case where the capital goods were used in the manufacture of the final products for three long years and later, these capital goods were destroyed in the fire as seen from the observations of the Hon ble High Court of Karnataka. The facts cannot be compared with the instant case where the goods were not put to use at all, hence not applicable. In the instant case, when the assessee purchased the capital goods and when he has paid the excise duty on them, in law, he is entitled to get the credit on the duty paid while clearing the finished products from his factory. Accordingly, he utilised the cenvat credit and cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only when the inputs are used in or in relation to the manufacture of the final product. In the present case they cannot even be said to have been used in relation to the manufacture of the final product, or can be said to have been destroyed during the manufacture of the final product, inasmuch as the same were admittedly not even issued for the manufacture. The appellants reliance upon the Larger Bench s decision in the case of Ashoke Iron is not appropriate inasmuch as the decision was given in the different set of facts and circumstances. The inputs were received by the appellants in that case, and were admittedly used in the manufacture of the final product, though no duty was paid on the final product. As such the facts and circumstances of that decision are distinguishable from the facts of the instant case inasmuch as in the present matter after receiving the inputs the same were destroyed by fire. 11 . Thus, the credit of Rs. 57,52,500/- involved on the inputs lying in stock and destroyed in the fire before being put to use could not be allowed to the appellant and the same is required to be paid back/reversed. 9. In view of the above, we do not find any reason to interfer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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