Modvat credit reversal for fire-destroyed goods referred to Larger Bench amid insurance and remission questions.

Modvat credit on inputs used in final products destroyed by fire was in issue where the loss had been covered by insurance and duty remission was also granted. The CESTAT referred the question to a Larger Bench for determination, indicating that the reversal of credit depended on resolution of the stated legal issue. Stay was granted pending that decision.

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Issues: Whether Modvat credit attributable to inputs used in the manufacture of final products destroyed by fire is liable to reversal where the loss is compensated by insurance and remission of duty is granted.

Outcome: The matter was referred to a Larger Bench for decision on the stated issue and stay was granted.

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