Benefit of Remission Allowable if Finished Goods and Semi-finished Goods Lost by Assessee u/r 21 of CENVAT credit rules: CESTAT [Read Order]

The Hyderabad bench of the Customs, Excise, And Service Tax Appellate Tribunal (CESTAT) held that the benefit of remission should be granted to the assessee if the finished goods and semi-finished goods were lost by them under rule 21 of the CENVAT Credit Rules, 2004. 

Regency Ceramics Ltd, the appellant assessee was the manufacturer of ceramic glazed tiles. The assessee appealed against the interim order passed by the Commissioner of Central Tax. 

B.V. Kumar, the counsel for the assessee contended that in terms of Rule 21 of Central Excise Rules, the assessee is entitled to get remission for the finished goods and semi-finished goods lost by them. 

It was further submitted that the assessee provided the documentary evidence for the complaints filed by them with the Police Department by way of the first information report and help provided to the assessee by the Fire Department in extinguishing the fire which has spread in the factory premises. 

Further stated that the assessee was entitled to get the claim of component of Excise Duty on the finished goods or semi-finished goods lost in the fire. 

P. Amaresh, the counsel for the revenue relied on the decisions made by the lower authorities and contended that The damage has been so extensive that it was not possible to start the functioning of the unit for many years to come and was not entitled to get the claim of duty for finishes goods which lost in the fire. 

The bench observed that this was a fit case where the assessee should have been granted the benefit of remission under Rule 21 of Central Excise Rules.  The two-member bench comprising R. Muralidhar (Judicial) and A.K. Jyotishi (Technical) held that the interim order passed by the Commissioner of Central Tax was not as per the law and liable to be deleted while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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