Cenvat credit remains admissible for job-work inputs destroyed in fire when goods' destruction is undisputed.

Cenvat credit on inputs sent for job work cannot be denied merely because the finished or semi-finished goods were destroyed in a fire and remission of duty was granted on those goods. Where the inputs were issued for manufacture and the factual destruction of the goods is undisputed, the controlling principle is that credit need not be reversed in these circumstances. The approved view referred to in the text treats remission of duty on the destroyed goods as not affecting admissibility of the input credit. The credit was therefore treated as admissible and reversal was not warranted.

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Issues: Whether Cenvat credit on inputs sent for job work and later destroyed in a fire accident could be denied after remission of duty had been granted on the finished or semi-finished goods.

Analysis: The inputs were issued for manufacture through job work under the Cenvat scheme, and the fire accident destroyed the goods before completion. The controlling principle applied was that once inputs are issued for manufacture and the factual destruction of the goods is not in dispute, the credit cannot be denied merely because remission of duty has been granted on the destroyed goods. The decision followed the binding effect of the Supreme Court-approved view that such credit is not required to be reversed in these circumstances.

Conclusion: The Cenvat credit was held admissible and the demand for reversal was set aside.

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