TAMBRAPARANI COATINGS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The appellants took Modvat credit on their inputs in June, 1998. There was an accident in their factory, in which the entire factory including finished goods, raw material stock and materials under processing was destroyed in fire. The lower appellate authority has denied the above credit to the assessee on the ground that the inputs were destroyed prior to utilisation in the process of manufacture. In the present appeal, the assessee's claim is that, when the fire struck the factory, the inputs were being processed and therefore they should be considered to have been utilised in the process of manufacture.

(2.) After examining the records and hearing both sides, I find no valid reason to interfere with the denial of credit. Even if the above claim of the assessee, which has been reiterated by their Counsel today, is accepted, one of the substantial conditions for input -duty -credit still remains unfulfilled. For the benefit of input -duty -credit under Rule 57A of the Central Excise Rules, 1944, during the material period, it was necessary that inputs were used in or in relation to the manufacture of the final product. In the instant case, it is not the appellants' case that the process of manufacture was completed before the fire stuck the factory. Apparently, inputs in stock and inputs under processing were, both, destroyed in the fire and no finished product resulted from the process in which the subject inputs were utilised. In the circumstances, it cannot be held that the inputs in question were utilised in the process of manufacture of "finished goods". The credit in question was rightly denied. In the result, the appeal gets dismissed.