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 when excise duty on final product is remitted; inputs lost by fire treated accordingly.
CENVAT credit on inputs must be reversed when duty on the final product is remitted; input services and capital goods are not required to be reversed under that provision. Commentators affirm departmental guidance requiring reversal in such circumstances and argue that inputs destroyed by fire, not having been used in manufacture, justify reversal to avoid cascading. The treatment where insurance pays the excise component was queried but not resolved in the discussion.