[Order]. - The appellant is in appeal against the impugned order rejected the refund claim, by holding that reversal of Cenvat credit was in the course of semi-finished goods lost in fire was in order.
2. The facts of the case are that on 24-4-2013 a fire accident in the factory premises of the appellant took place wherein certain stocks of goods, machinery and building was reported burnt/damaged. Intimation to this effect was given by the appellant to the Divisional Assistant Commissioner of Central Excise and FIR was also lodged. The appellant also filed claim of remission of duty on finished goods and inputs. The appellant was directed to reverse the Cenvat credit on inputs which has gone in work in progress. The appellant reversed the Cenvat credit on inputs which has gone in work in progress. Later on, the appellant realised that the inputs contained in the work in progress/semi-finished goods lost in fire, the appellant is not required to reverse Cenvat credit. Therefore, the appellant filed a refund claim which was rejected by both the authorities below.
3. Aggrieved from the said order appellant is before me.
4. The ld. Counsel for the appellant submitted that initially the refund claim was rejected by the adjudicating authority on the premises that as the appellant informed the department that they are giving the figures of written off work in progress in their balance sheet and has not been finalised that they will submit the same. In view of the above, the adjudicating authority rejected their refund claim in terms of Rule 3(5B) of the Cenvat Credit Rules, 2004 read with C.B.E. & C. Circular No. 907/27/2009-CX, dated 7-12-2009. The said order was challenged before the ld. Commissioner (Appeals) who rejected the refund claim relying on the provisional Rule 3(5C) of the Cenvat Credit Rules, 2004. As the provisionally Rule 3(5C) of Cenvat Credit Rules, 2004 are not applicable. In this case, therefore, he submits that the impugned order may be set aside and appeal be allowed.
5. On the other hand, the ld. AR reiterated the finding of the impugned order and submits that the appellant have written off the credit pertains to work in progress in that way provisions of Rule 3(5B) are invoked, consequently, the appellant are not entitled to avail Cenvat credit.
6. Heard the parties considered the submissions.
7. In this case the appellant has filed the claim refund on duty paid by them on account of reversal of Cenvat credit availed on inputs which were used in work in progress/semi-finished goods. Admittedly, the inputs on which Cenvat credit was availed by the appellant were used in manufacture of final goods. Therefore, the Cenvat credit cannot be denied to the appellant, moreover, the work in progress lost in fire. Therefore, appellant is not entitled for claim of remission of duty but the appellant cannot be asked to reverse Cenvat credit. It is a fact on record that the appellant has not written off the value of semi-finished goods/work in progress. In that circumstance, Rule 3(5B) of the CCR, 2004 is not applicable in this case. Further, I have gone through to the provisional Rule 3(5C) of the Cenvat Credit Rules, 2004 which are not applicable to the facts of this case as appellant has not filed any claim of remission of duty under Rule 21 of the Central Excise Rules, 2002. Therefore, the impugned order is not sustainable in the eyes of law. Consequently, the same is set aside and the appeal is allowed with consequential relief, if any.