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2013 (10) TMI 790 - AT - Central ExciseBenefit of Closing Balance of RG-23A and PLA post fire accident - goods lost in fire - reversal of credit on inputs not used in the manufacturing - Held that:- The benefit of closing balance of RG-23A Part-II and PLA as on date of fire, the reasoning given seems to be very sketchy and unconvincing - The appellant were not able to put on record the closing balance of RG-23A Part-II and PLA as on 28.02.1996 - the best way to calculate the closing balance on 27.03.2006 would have been to take the balance of RG-23A Part-II and PLA as on 28.02.1996, and work out the closing balance, and could have been ascertained by the appellant from the monthly returns filed with the department - no exercise has been done by the appellant on this front - the balance as on 27.03.1996 i.e. on the day of fire as worked out by the appellant is unconvincing and the order to that extent which rejects such a claim by the appellant is upheld. Reversal of MODVAT Credit – Held that:- The amount of modvat credit that needs to be reversed on the bought out items - the first appellate authority has tried to work out actual modvat credit availed on the basis of average rate of duty - the calculation of duty on brought of the first appellate authority seems to be erroneous, if the value of the bought out items as worked out by the appellant is considered, then the calculation of modvat / cenvat credit on such items based upon percentage of modvat availed to the value of bought out items also needs to be accepted - Applying the law of average or applying the highest rate of duty in such a situation is inappropriate and incorrect, the subsequent amendment to modvat / cenvat credit rules indicate the liability of reversal of cenvat credit should be based upon the value or the proportion of the credit availed to the value – there was no reason for rejecting the claim of the assessee as to the modvat credit that needs to be reversed on the bought out items – Decided partly in favour of Assessee.
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