Raw matl damage in floods - cenvat -reg, Central Excise

[venkat eswaran]

Dear All,

In recent floods in Chennai, i our factory lot of Raw matls gets demaged. we calimed in insruance for about 5 laks.

what about the procedure to follow regarding Central Exsie cenvat on this?

Pl share ur views?

thanks in advance

Venkat

Posts / Replies

[KASTURI SETHI]

Sh. Venkat Eswaran Ji,

It is presumed that you must have filed insurance claim (including CE duty involved). It is also seen that Insurance Company never sanctions full amount as claimed. Since you have received insurance claim of ₹ 5 lakhs, it is better to reverse cenvat credit involved in the material got damaged in floods.If not reversed, as per the practice of the department, you may receive show cause notice because you have received the insurance claim of ₹ 5 lakhs. So avoid SCN.

[YAGAY AND SUN]

Where inputs have been destroyed as such, proportionate credit of duty paid on such inputs is required to be reversed as the goods have not been put to use in manufacture of excisable goods.

[KASTURI SETHI]

I agree with the views of M/s.YAGAY AND SUN, Sirs.