Hindalco Industries Limited Vs Commissioner of Central Excise (CESTAT Kolkata)
Summary: The Customs, Excise & Service Tax Appellate Tribunal, Kolkata Regional Bench, allowed the appeal filed by M/s Hindalco Industries Limited against the order of the Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar II, which denied CENVAT credit on inputs contained in work-in-process destroyed because of a power outage during manufacture.
The appellant was engaged in manufacturing aluminium and carbon electrodes. On 28.09.2008, a flash-over occurred in the power transformer at its premises and a grid under-voltage simultaneously caused all TGs to trip, resulting in a station outage at all rectifier stations. The power failure continued for more than six hours, causing 61 pots in Line II and III to fail. The bath and molten metal consequently froze, resulting in substantial production loss as well as additional start-up, repair and maintenance costs.
Following the outage, the appellant lodged an insurance claim on 09.03.2009. The claim was stated to be net of the CENVAT credit component and the revenue from items disposed of as scrap on payment of duty. The Superintendent (Audit), by letter dated 24.11.2009, sought details concerning the sanctioned portion of the insurance claim, which the appellant supplied.
