Finished goods burnt by fire- reg

[vinay wakde]

We are manufacturer finished goods namely Direct Reduced Iron (DRI) i.e. Sponge Iron (CH No. 7203 10 00). Recently, there was fire in our finished goods stock yard where the DRI was stored. We have submitted an application for remission of duty under Rule 21 to the jurisdictional Central Excise authorities. We have now decided to recycle/consume the said burnt material with our raw material in proportion 10:90 in the plant, after seeking necessary permission from the Central Excise.

Kindly let us know, whether proportionate CENVAT taken to be reversed to the extent of quantity consumed for manufacture of DRI which is subsequently burnt? is there any duty demand in future from the Department?

With Best regards,

VINAY

AI Summary

Cenvat credit reversal required for destroyed finished goods; reuse may allow proportionate credit with evidence and compliance.
Remission under Rule 21 requires reversal of Cenvat credit attributable to destroyed finished goods as per Rule 3; remission may be denied absent evidence of precautions against the fire and reversal. Reuse of burnt finished goods as input has no explicit rule, but Rule 3 permits credit if the material is duty paid and actually used in manufacture; documentary evidence and procedural compliance are essential, and the department may issue demand notices leading to litigation.