TaxTMI 
TaxTMI 
2010 (7) TMI 433
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....uestions : "[1] Whether, in the facts and circumstances of this case, the Tribunal is justified in setting aside the demand of duty on finished goods and semi-finished goods which were destroyed in fire by holding that the provisions of the Modvat Rules seek reversal of credit only in a situation where the capital goods are either removed as such or sold? [2] Whether, in the facts and circumstances of this case, the Tribunal is justified in setting aside the demand of duty on finished as well as semi-finished goods destroyed in fire by holding that the adjudicating authority has not disputed the fact that the goods were fully destroyed in fire inspite of the respondent having taken all the precaution whereas the remission applic....
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....ry/capital goods destroyed in the fire. Central excise duty amounting to Rs. 9,30,300/- also came to be confirmed in respect of the semi-finished goods and finished goods destroyed in the fire. The respondent was also directed to reverse the cenvat credit of Rs. 95,503/- availed on the inputs used in semi-finished and finished goods destroyed in the fire and cenvat credit of Rs. 60,558/- in respect of the inputs destroyed as such in the fire. Interest came to be levied under Section 11B of the Act and penalty of Rs. 25 lakhs also came to be levied under Rule 25 of the Cenvat Credit Rules, 2004. 3.The assessee carried the matter in appeal before the Tribunal and has partly succeeded. 4. Mr. Varun Patel, learned standing counsel fo....
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....fire accident. The Tribunal found that when the credit in respect of the capital goods had been availed, the same was in accordance with law. The capital goods had been put to use for a number of years before the same were ultimately destroyed in the fire. That the provisions of Modvat Rules provide for reversal of credit only in a situation where the capital goods are either removed as such or sold. In the instant case, neither the capital goods had been cleared "as such" nor removed on sale. The Tribunal, accordingly, did not find any justification for reversal of modvat credit availed by the respondent on the capital goods, which after being put to use were fully destroyed in the fire accident. 6. From the facts noted hereinabove....