Cenvat credit on fire-damaged goods need not be reversed where binding precedent applies and no substantial question of law arises.

Cenvat credit on inputs used in finished and semi-finished goods destroyed in a fire accident was not required to be reversed where the controversy was treated as covered by binding precedent, including Grasim Industries. The dispute was viewed as one of quantification of the value of the goods lost, not as a basis for appellate interference, and the Revenue failed on that issue. No substantial question of law was found to arise under Section 35G of the Central Excise Act, 1944, so the Revenue's appeals were not maintainable on that ground. The Tribunal's common order was left undisturbed.

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Issues: (i) Whether Cenvat credit taken on inputs used in finished and semi-finished goods lost in a fire accident was liable to be reversed; (ii) whether the Revenue's appeals gave rise to any substantial question of law under Section 35G of the Central Excise Act, 1944.

Issue (i): Whether Cenvat credit taken on inputs used in finished and semi-finished goods lost in a fire accident was liable to be reversed.

Analysis: The Tribunal had applied the Larger Bench decision in Grasim Industries and treated the controversy as covered by that ruling. The dispute was viewed as turning on quantification of the value of the goods lost, rather than on a question warranting appellate interference at the instance of the Revenue.

Conclusion: The issue was decided against the Revenue and in favour of the assessee.

Issue (ii): Whether the Revenue's appeals gave rise to any substantial question of law under Section 35G of the Central Excise Act, 1944.

Analysis: No substantial question of law was found to arise, and the appeals were therefore not maintainable on that basis.

Conclusion: The issue was decided against the Revenue and in favour of the assessee.

Final Conclusion: The common order of the Tribunal was left undisturbed and the Revenue's appeals failed.

Ratio Decidendi: Where the controversy is covered by binding precedent and does not raise a substantial question of law, appellate interference under Section 35G of the Central Excise Act, 1944 is not warranted.

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