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2014 (11) TMI 704 - HC - Central ExciseReversal of CENVAT Credit - Whether on facts and in the circumstances of the case, the Hon’ble CESTAT, is justified in law in permitting the first respondent M/s. Fenner India Ltd., to avail the Cenvat credit of duty paid on inputs as work- in-progress (WIP) which was destroyed in the fire accident - Held that:- Inputs on which the assessee availed Cenvat credit were destroyed in a fire accident while the work was in progress in the assessee’s factory on 5-5-2006. The fire accident was informed to the Department in writing on the same day - it is not in dispute that the inputs on which the Cenvat credit was availed were destroyed when the work was in progress. Once this fact is not disputed, then the assessee cannot be called upon to reverse the credit. goods destroyed in fire after being used for many years cannot be said as not used in the manufacture of final and finished product and the assessee need not reverse the credit availed on inputs used in finished or semi-finished goods. Further clause (5C) to Rule 3 of the Cenvat Credit Rules, 2004 would be invoked “where on any goods manufactured or produced by an assessee, the payment of duty is ordered to be remitted under Rule 21 of the Central Excise Rules, 2002, the Cenvat credit taken on the inputs used in the manufacture of production of said goods shall be reversed”. question of reversal would occur only when the payment of duty is ordered to be remitted under Rule 21 of the Central Excise Rules, 2002. The said Rule deals with remission of duty. Admittedly, the assessee has not claimed any remission and no final product has been removed. Hence, for that reason also, reliance was placed on clause (5C) to Rule 3 of the Cenvat Credit Rules, 2004. - Following decision of Commissioner of Central Excise and Customs v. Biopac India Corporation Ltd. [2010 (7) TMI 433 - GUJARAT HIGH COURT] - Decided against Revenue.
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