TMI Blog2016 (7) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... rance which covered the risk of the capital goods. The insurance company in terms of the policy agreement, has compensated the assessee with the value of goods destroyed in fire, including the excise duty paid by them. The Compensation scheme from the insurance company has no relevance for availment of credit on capital goods purchased in 2006. The fact that the appellant claimed insurance, which is inclusive of Excise Duty, is not at all relevant. Demand set aside - Decided in favor of assessee. - Appeal No. E/41370/2014 - Final Order No. 41061/2016 - Dated:- 4-7-2016 - Shri P. K. Choudhary, Judicial Member For the Appellant : Shri M. Kannan, Advocate For the Respondent : Shri K. Veerabhadra Reddy, JC (AR) ORDER Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal filed by the appellant and upheld the OIO. Hence the present appeal before the Tribunal. 3. Shri M. Kannan, Ld. Advocate submits that the original capital goods were purchased in the year 1991 and no modvat credit scheme was available at that time. He submits that there was no irregular availment of credit inasmuch as the impugned machineries were installed in 1991 when there was no modvat scheme available. Since the goods purchased in 1991 were lost in fire accident in 2006, the question of availing irregular credit or removal of capital goods outside the factory does not arise. After the fire accident, appellants got compensation from the insurance company which included the excise duty component. He further submits that the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I find that the credit was disallowed only on the premise that the original equipment was purchased in 1991 when no credit scheme was in force. It is an undisputed fact that there was no such provision in Cenvat rules for denial of capital goods credit on the parts imported for replacement, particularly during that period original equipments were not covered under modvat scheme. The assessee has paid the premium for insurance which covered the risk of the capital goods. The insurance company in terms of the policy agreement, has compensated the assessee with the value of goods destroyed in fire, including the excise duty paid by them. The Compensation scheme from the insurance company has no relevance for availment of credit on capital goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore indefeasible. It should also be noted that there is no co-relation of the raw material and the final product; that is to say, it is not as if credit-can be taken only on a final product that is manufactured out of the particular raw material to which the credit is related. The credit may be taken against the excise duty on a final product manufactured on the very day that it becomes available. 6. Therefore, it is clear that there is no provision in the rules which provides for a reversal of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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