2015 (10) TMI 423

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....ss which were lost in fire. 2. The facts of the case are that on 29.2.2010 the fire broke out in the factory of the respondent wherein semi-fmished goods and work-in-progress was destroyed. The respondent filed remission claim of duty under Rule 21 of the CER, 2002 which was rejected by the learned Commissioner on the premise that the semi-finished goods and work-in-progress are not excisable, therefore, claim of remission is not sustainable. 3. Thereafter Show cause notice was issued to the respondent to reverse the Cenvat credit on the inputs used in semi-finished goods/work-in-progress under Rule 3(5B) of the CCR, 2004. Both the lower authorities dropped the show cause notice holding that respondent is not required to reverse the C....

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....ion of the learned AR is that the Show cause notice was issued to the respondent to reverse the Cenvat credit as per the provision of Rule 3(5B) of the CCR, 2004 and CBEC Circular No. 907/27/09-CE dated 7.12.09. For better appreciation, the provision of Rule 3(5B) of the said Rules are extracted hereinunder: "Cenvat Credit Rules, 2004 3 (5B) (5B). If the value of any, (i) input, or (ii) capital goods before being put to use, on which CENVAT Credit has been taken is written off fully or where any provision to write off fully has been made in the books of account, then the manufacturer shall pay an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods: Provided that if the said input or c....

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....oods destroyed in fire. 11. Further, I find that CBEC Circular No. 907/27/09 CE dated 7.12.09 is contrary to the judicial pronouncement of this Tribunal wherein in the case of Nectar Lifescience (supra), this Tribunal has examined the Rule as well as the CBEC Circular and thereafter held as under: "13. We further note that the legal issue as regards reversal of credit is well settled. If the inputs, on which the credit stand availed were issued for further manufacture of the goods and goods are destroyed during the course of manufacture of the goods, no reversal of Cenvat credit is called for. For the above proposition, reference can be made to the Tribunal's decision in the case of Commissioner of Central Excise and Customs, Pune....

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....inputs had been issued for manufacturing and were work in progress. It is seen that the Commissioner has referred to the appellants claim made before the insurance company, wherein description of the goods stand given by them and has concluded that inasmuch as the goods described by the name of the inputs, on which credit was availed, it has to be held as if the inputs were destroyed. However, this stand explained by the learned advocate appearing for the appellant, that during the process of manufacture, there are various recoveries of the same inputs, which are again used at the manufacturing floor. We find that without referring to the technical details, we note that there is no dispute about the fact that input store is situated at a pl....