Order date – 20 October 2022

Facts –

• The Appellant, Bajaj Herbal Private Ltd., is engaged in the manufacture of excisable goods namely, hair oil, hair cream, hair dye powder, tooth paste, hand wash liquid, beauty fairness cream, petroleum jelly, hair conditioner/ shampoo, talcum powder etc. falling under chapter 33 of the First Schedule of Central Excise Tariff Act, 1985 and availing the facility of Cenvat credit of duty paid on the inputs and capital goods under Cenvat Credit Rules, 2004.
• The appellant filed application for remission of excise duty under Rule 21 of the Central Excise Rules, 2002 on finished goods claiming that their finished goods were destroyed in the fire accident on 30.04.2012
• A show cause notice was issued on the ground that the appellant did not take adequate steps and precaution in storing their finished goods as it is established that the fire accident has taken place as result of negligence which can't be considered as natural cause or unavoidable accident in order to grant remission of duty of Excise. It was also alleged that the appellant before filing the remission application have not reversed the cenvat credit of duty involved in the raw material used in the manufacture of finished goods so destroyed. 
• Aggrieve appellant has filed an appeal.

Issue – 

• Whether the remission of duty can be rejected on goods destroyed in a fire accident?

Order – 

• The Tribunal observed that the there is no dispute that a fire has taken place in the factory of the appellant due to short circuit and the finished goods was destroyed along with other material like packing materials and consumables. It is observed that immediately when the fire took place the management of the appellant company has intimated to the concerned local authorities
• The most important agency in such cases are the insurance company .It is further observed that the insurance company New India Insurane Company Limited had submitted report with no allegation against the appalleant. Hence it is held that there is no dispute in it.
• As regard, the reversal of cenvat credit, there is no dispute that the appellant is duty bound to reverse the cenvat credit on the inputs contained in finished goods which were destroyed in fire incident. 
• It is held that the case is clearly covered under the four corners of Rule 21 of Central Excise Rules, 2002 and the appellant is clearly eligible for remission of duty on the finished goods destroyed in fire incident. Hence, set aside the order rejecting the remission of duty.