2014 (2) TMI 208

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....ice proposing to recover Cenvat Credit availed on inputs which were utilized in the manufacturing of the under process finished goods destroyed in fire/explosion and also proposed to demand, interest and imposed penalty. Adjudicating authority confirmed demands alongwith interest and also imposed penalty. Aggrieved by such an order, appellant preferred an appeal to the first appellate authority. The first appellate authority did not agree with the contentions raised by the appellant and upheld the Order in Original solely on the ground that the appellant were compensated by the insurance company for a value which was much more, would indicate that they were compensated for Cenvat Credit involved in such inputs. He also held that no evidence....

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....considered the submissions made at length by both sides and perused the records. 6. On perusal of the records, it transpires that the appellant herein had availed the Cenvat Credit on the inputs which were consumed for the manufacturing of final products. Before the final products could emerge, during the process, due to unfortunate fire / explosion, the goods got destroyed. It is also undisputed that the appellant had insured the premises and the stocks including the work in process stock with insurance agencies and had received the insurance claim lodged by him. 7. On the background of such a factual matrix, it needs to be considered whether a denial of Cenvat Credit to the appellant on the inputs consumed during the course of manufactu....

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....t it stands cancelled or if utilised has to be paid for. This is not the case of the revenue. In the instant case, when the assessee purchased the capital goods and when he has paid the excise duty on them, in law, he is entitled to get the credit on the duty paid while clearing the finished products from his factory. Accordingly, he utilised the cenvat credit and cleared the finished products. It is about three years after such payment, the capital goods were destroyed in fire. As the assessee had insured the said capital goods, he put forth a claim for payment of the loss sustained by him, which includes the payment of excise duty. The Insurance Company in terms of the policy has compensated the assessee. Merely because the Insurance Comp....