Modvat credit on inputs in fire-destroyed goods remains admissible, with waiver granted unconditionally.

Modvat credit on inputs used in the manufacture of finished or semi-finished goods destroyed in fire was treated as admissible, on the reasoning that destruction of the goods does not by itself extinguish the input credit linked to them. The Tribunal also noted the waiver request in the context of claimed remission under Rule 49 of the Central Excise Rules, 1944 and an objection on maintainability under Section 35B of the Central Excise Act, 1944. The waiver application was allowed unconditionally.

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Issues: Whether Modvat credit was admissible on inputs used in the manufacture of finished or semi-finished goods that were destroyed in fire.

Analysis: The application for waiver of pre-deposit was considered in the light of the claimed remission under Rule 49 of the Central Excise Rules, 1944 and the objection based on maintainability under Section 35B of the Central Excise Act, 1944. The Tribunal relied on its earlier view that where the final or semi-finished goods are destroyed in fire, the credit relatable to inputs used in such goods remains admissible.

Conclusion: Modvat credit was held admissible and the waiver application was allowed unconditionally.

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