CENVAT Credit-Inputs & Machinery lost in Fire

[Vinay Sharma]

The Inputs/Semi Processed Goods and Machinery lost due to fire in Factory premises.

Are we supposed to reverse the CENVAT credit on Inputs and Machinery.

What happens if the insurance company pays for excise component of Inputs and capital goods lost in fire.

Please clarify.

 

AI Summary

CENVAT Credit Reversal Required for Inputs Lost in Factory Fire Under Rule 3(5c) When Duty on Final Product is Remitted. A discussion on a forum addresses whether CENVAT credit must be reversed for inputs and machinery lost in a factory fire. One participant confirms that departmental clarification requires reversal if the duty on the final product is remitted. Rule 3(5c) of the CENVAT Credit Rules mandates reversing credit on inputs if duty is remitted on the final product, but not for input services and capital goods. Another participant questions this, noting the issue involves inputs and semi-processed goods, not final products. The consensus indicates reversal is necessary as the inputs were not used for manufacturing excisable goods.