Case Law Details
Cipy Polyurethanes Pvt. Ltd. Vs Commissioner of Central Excise (CESTAT Mumbai)
The decision of Hon’ble Apex Court in the case of BPL Display Devices Ltd [2004 (174) ELT 5 (SC)] clearly lays down that once the goods are procured for an intended use, then the benefit available and availed by them should not be denied just because for some reason they were not used so. We have seen certain decisions of Tribunal which lay distinction between inputs as such destroyed and those destroyed after being issued for production etc. Clearly these decisions cannot be said to be in line with the decision of Hon’ble Apex Court or the scheme of CENVAT credit. CENVAT credit is allowed to the manufacturer or the provider of output service on inputs received by him against the duty paying document prescribed immediately on the receipt of goods. Definitely no prudent businessman sets up the business just for taking the CENVAT credit and thereafter destroying those inputs by setting them on fire. He intends to use the goods to manufacture the finished goods. The process of production as envisaged in CENVAT Credit Scheme thus commences the moment the goods are received by the manufacturer in his manufactory, and CENVAT Credit Scheme acknowledges this fact as it allows the taking of credit and even utilization of the same instantaneously on receipt of inputs. All the inputs, packing materials whether in process of manufacture or intended to be used in the process of manufacture of the finished goods which were destroyed in fire accident and could not be used so are covered by the decision of the Hon’ble Supreme Court, we are not in position to agree with the findings recorded by the Commissioner demanding the reversal of CENVAT Credit by invoking the provisions of Rule 3 (5B) of the CENVAT Credit Rules, 2004.
FULL TEXT OF THE CESTAT MUMBAI JUDGEMENT
This appeal has been filed by the appellant against order in original No KLH-EXCUS-000-COM-0001-17-18 dated 19.05.2017 of the Commissioner Central Excise Kolhapur. By the impugned order Learned Commissioner has held as follows:
“i) I order remission of duty of Rs. 28,06,385/- under the provisions of Rule 21 of Central Excise Rules, 2002, on, the finished goods valued at Rs. 2,24,51,0871 destroyed in the fire accident of the night of 02.04.2015, subject to reversal of CENVAT credit on inputs contained in the said finished goods.
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