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TMI Blog2023 (7) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ich while there was no loss of the finished goods, the inputs in stock in respect of which cenvat credit had been taken and inputs in process in respect of which also cenvat credit had been taken, were lost. The appellant lodged a FIR about the fire and reported fire accident to the jurisdictional central excise officers vide letter dated 20.11.2007. While the cenvat credit taken in respect of inputs in stock which were lost in fire accident was reversed, the appellant did not reverse the cenvat credit amounting to Rs.24,76,855/-, which has been availed in respect of inputs in process and which had also been lost in fire. The department also found that the cenvat credit in respect of the inputs lost in fire had been reversed by making a debit entry in Cenvat Credit Account in February, 2008, which according to the department, they were not allowed, as they were availing of the duty exemption under Notification No.56/2002-CE. According to the Department, the appellants were required to use the cenvat credit available in a month for the payment of duty only, so that they can get refund of the duty, which after utilization of the cenvat credit, was paid in cash. The department, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -deposit and stay the recovery during the pendency of the appeal and fixed the hearing of the appeal for final disposal on 20.04.2023. In this background, we heard the parties on merit on 20.04.2023. 5. Heard the parties and perused the case records. 6. Ld. Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law and the binding judicial precedents on the same issue. He further submitted that there are three issues involved in the present appeal and the first issue is regarding the reversal of cenvat credit on input lost in fire as such, the Ld. Counsel submitted that he has no objection so far as the reversal of cenvat credit on input is concerned and in fact he has debited Rs. 4,34,573/- in credit account and Rs. 47,626/- in account current in ER-1 for February 2008 as soon as jurisdictional Range Officer asked him to do and accordingly informed the department. 7. With regard to issue No. 2 pertaining to reversal of cenvat credit on Material in Process (MIP)/Work in Progress (WIP) destroyed in fire, the Ld. Counsel submitted that this demand confirmed by the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit on input lost in fire as such there is no dispute and the appellant himself has reversed the cenvat credit which is admitted by the department itself. Therefore, there is no dispute with regard to this issue. 11. As far as the second issue pertaining to cenvat credit on material in process/work in progress destroyed in fire is concerned, we find that the original authority as well as the appellate authority both have invoked Rule 3(5B) and 3(5C) to confirm the demand. Hear, it is pertinent to reproduce the Rule 3 of Cenvat Credit Rules, 2004 as under:- Rule 3 CENVAT Credit (5) When inputs or capital goods on which CENVAT credit has been taken are removed as such from the factory, or premises of the provider of output service the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in rule 9. (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 partly or where any provision t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 v. Spectra Speciality [2008 (231) E.L.T. 346 (Tri.-Mum.)] as upheld by the Hon'ble Supreme Court as reported in [2009 (240) E.L.T. A77]. To the same effect is another decision of the Tribunal in the case of Commissioner of Central Excise, Chennai v. Indchem Electronics [2003 (151) E.L.T. 393 (Tri.-Chennai)] wherein it stand held that where inputs were actually issued and thereafter destroyed in fire accident, there is no requirement of reversal of Cenvat credit. The said decision also stands upheld by the Hon'ble Supreme Court, when the appeal filed by the Revenue was dismissed, as reported in 2003 (157) E.L.T. A206 (S.C.)]. The list is unending and we do not feel any need to refer to all such decisions as the issue is almost settled 12. Therefore, I hold that respondents are not required to reverse the Cenvat credit. As such, I do ..... 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