M/S Rohit Polyproducts (P) Ltd vs C.C.E. & S.T. Jaipur-I

[Arising out of Order-In-Appeal No. 55(VC)CE/JPR-I/2013/18.06.2013 dated: 31.05.2013 passed by CCE Jaipur-I]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s Rohit Polyproducts (P) Ltd. ...Appellant

Vs.

C.C.E. & S.T. Jaipur-I Respondent

Appearance:

Mr. Jitin Mahajan, Advocate for the Appellants

Mr. R K Mishra, DR for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing.01.06.2015

FINAL ORDER NO. 53089 /2015

Per S. K. Mohanty:

The brief facts of the case are that the appellant is a manufacturer of Polyethylene Foam Sheet. The appellant avails cenvat credit of various inputs used in or in relation to manufacture of the said final product. On 09.04.2010, fire accident occurred in the factory premises of the appellant, which has resulted in damage of the main plant/ machinery/ raw materials/ material in process/ finished goods and waste materials available in the factory. Since, the inputs issued to the plant of manufacture of the finished goods have also been destroyed/ damaged, the Central Excise Department initiated proceedings for recovery of the cenvat credit attributable to such damaged inputs. The cenvat demand was confirmed in the Adjudication Order dated 8.6.2012. In appeal, the Commissioner (Appeals), vide the impugned order has upheld the cenvat credit demand and dropped the penalty imposed in the Adjudication Order. Hence, this present appeal before this Tribunal.

2. Sh. Jitin Mahajan, the Ld. Advocate of the appellant submits that as per the statutory mandates, no cenvat credit is required to be reversed in the case of unprocessed material destroyed in fire, for the reason that the same goods have not been removed from the factory.

3. Per contra, Sh. R K Mishra, the Ld. DR for the Respondent submits that since the claim towards loss on account of fire has been settled by the Insurance Company, with regard to the inputs, the cenvat benefit cannot be extended because the same would amount to double benefit of credit.

4. To the said submissions of the Ld. DR, the Ld. Advocate relies on the judgment of Honble Karnataka High Court in the case of CCE Bangalore vs Tata Advanced Materials Ltd. (supra) and the decisions of the Tribunal in the cases of Themis Medicare Ltd. vs CCE & ST Daman (supra), Libra International Ltd. vs CCE Chandigarh (supra) and CCE Pondicherry vs Supreme Industries Ltd. (supra), to justify his stand that merely because the insurance company paid the appellant the value of goods including the excise duty paid, that would not rendered the availment of the cenvat credit wrong or irregular.

5. I have heard the Ld. Counsel for both the sides and perused the records.

6. Rule 14 of the Cenvat Credit Rules, 2004, deals with recovery of cenvat credit taken or utilized wrongly. There is no allegation that the duty paid inputs have not been received in the factory for use in or in relation to manufacture of final product. Since, the inputs have not been diverted elsewhere and admittedly used by the appellant for the intended purpose, I am of the view that the provisions of Rule 14 have not been violated. Merely because of the fact that the insurance company has settled the claim of appellant towards the damaged input, that would not render the availment of cenvat credit wrong or irregular. I find support from the decisions cited by the Ld. Advocate for appellant that since taking of cenvat credit is not in dispute and the inputs goods have not been removed from the factory, credit taken cannot be denied.

8. In view of the above settled position of law, I am of the opinion that the impugned order is not maintainable, and accordingly, the same is set aside and the appeal is allowed in favour of the appellant with consequential relief, if any, as per law.

(Dictated and pronounced in open court)

(S.K. Mohanty)

Member(Judicial)

Neha

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