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TMI Blog2015 (7) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, more so, when the said provision does not provide for reversal of credit, as has been observed by the Tribunal, which we approve. - Decided against Revenue. - Civil Miscellaneous Appeal No. 2940 of 2007 - - - Dated:- 11-6-2015 - R. Sudhakar And K. B. K. Vasuki,JJ. For the Appellant : Mr.J. Haja Mohideen Gisthi For the Respondent : No appearance - R1 ORDER (Judgment of the Court was delivered by R. Sudhakar,J.) This Civil Miscellaneous Appeal filed as against the order of the Tribunal was admitted by this Court on the following substantial questions of law: 1. Whether the decision of the Tribunal is correct in law in rejecting the claim of reversal of CENVAT credit by the Department especially when Rule 21 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Industries Ltd. V. CCE, Ahmedabad reported in 2003 53 RLT 578, which held that input credit should be reversed in such circumstances. The first respondent/assessee relied upon the decision of the Tribunal in the case of Inalsa Ltd. V. CCE, New Delhi reported in [1997] (90) ELT 417 (Tri.), wherein the Tribunal took a contrary view. In the decision reported in 2006 (199) ELT 437 (Grasim Industries Ltd. Vs. CCE, Indore), the single Member of the Tribunal referred the issue to the Larger Bench and the Larger Bench of the Tribunal approved the view taken in the case of Inalsa Ltd. V. CCE, New Delhi reported in [1997] (90) ELT 417 (Tri.) and overruled the decision in the case of Mafatlal Industries Ltd. V. CCE, Ahmedabad reported in 2003 53 R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , whereas in the present case, the remission of duty is on account of goods being lost or destroyed by natural cause or accident and as such, the order of remission was granted, but it does not provide for any condition regarding reversal of credit taken in respect of inputs used in such goods. 7. In the decision reported in 2007 (208) E.L.T. 336 (Tri.-LB) (Grasim Industries Ltd. Vs. CCE, Indore), the Larger Bench of the Tribunal approved the view taken in the decision in the case of Inalsa Ltd. V. CCE, New Delhi reported in [1997] (90) ELT 417 (Tri.). We extract the relevant portion of the decision of the Larger Bench as such for better clarity. 6. We find that the Tribunal in the case of Inalsa Ltd. v. CCE, New Delhi (supra) held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods become unfit for consumption or for marketing at any time before removal does not provide reversal of credit in respect of inputs used in the manufacture of such goods. The Modvat rules prohibits the credit of duty paid in respect of the inputs which are used in the manufacture of exempted goods in respect of the inputs which are used in the manufacture of exempted goods which are chargeable to nil rate of duty. The Tribunal in both the cases, that is Mafatlal Industries (supra) and in the case of Inalsa Ltd. (supra) held that in case the goods were destroyed due to natural cause or by unavoidable accident during handling or storage, cannot be equated with exemption to goods and the inputs can be considered to have been put to intende ..... X X X X Extracts X X X X X X X X Extracts X X X X
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