By TIOL News Service

NEW DELHI, APR 25, 2014: THE short issue involved is as to whether the appellant is entitled to the remission of duty in terms of the provision of Rule 21 of the CER, 2002, in respect of the semi-finished goods/work in process, destroyed in fire accident.

The Commissioner (A) has rejected the remission application on the ground that no remission is required for semi-finished goods inasmuch as Rule 21 of CER, 2002 is applicable for finished excisable goods and in process goods. The lower appellate authority also observed that the revenue is not asking the appellant for reversal of input credit involved in such destroyed semi-finished goods;the assessee is under no obligation to pay duty on the semi-finished goods inasmuch as admittedly the same are not fully manufactured goods.

The Bench noted that the Tribunal in the case of Urmi Chemicals vs. CCE, Mumbai-III 2013-TIOL-1947-CESTAT-MUM has held that semi-finished goods cannot be cleared and, therefore, no duty liability would arise in respect of the destroyed semi-finished goods.

And further observed -

"5. Admittedly, in the present case the appellant is not liable to pay duty on the semi-finished goods. As such, there is no requirement to file the remission application. No duty can be confirmed against them in respect of the said semi-finished goods. In fact, I find that vide impugned order of Commissioner (Appeals) has not confirmed any duty against the assessee and has simplicitor rejected the remission application, which is not going to adversely affect the appellants.

6. Accordingly, without going into the technical issue is as to whether the remission is required in semi-finished goods are not, as I am of the view the appellant is not liable to pay any duty, the rejection or acceptance of the remission application is ineffective…."

The appeal was accordingly disposed of.

(See 2014-TIOL-640-CESTAT-DEL)