LOSS OF SEMIFINISHED GOODS BY FIRE

[RAM SHARMA]

Dear Experts,

If some semifinished ,work in progess and machinery loss by fire then what will be the consequences in central excise point of view and insurance point of view.

Thanks

[YAGAY andSUN]

If you have get he insurance claim alongwith the potential duty element, then, you would have to reverse the proportionate CENVAT credit. 

[RAM SHARMA]

Is it compulsory to intimate in Excise Department.

[YAGAY andSUN]

Yes, since, revenue is involved in such incidence, therefore, it is compulsory to make them aware to cope with any unwarrented situations which may arise in the near future.

AI Summary

Loss of Semifinished Goods to Fire: Reverse CENVAT Credit if Insurance Covers Duty Element; Notify Excise Department. A query was raised regarding the implications of losing semifinished goods, work in progress, and machinery to fire from the perspectives of central excise and insurance. An expert advised that if an insurance claim is received, including the duty element, the proportionate CENVAT credit must be reversed. It was further clarified that it is mandatory to inform the Excise Department about such incidents due to the involvement of revenue, to manage any potential future issues.