2002 (7) TMI 306 - AT - Central Excise

Summary

Issues:
1. Application for remission of duty due to fire accident.
2. Rejection of remission claim by the Commissioner of Central Excise.
3. Appeal against the Commissioner's order.

Issue 1: Application for Remission of Duty due to Fire Accident:
The appellants, engaged in manufacturing Cane Sugar, Molasses, and Denatured Ethyl Alcohol, submitted an application for remission of duty amounting to Rs. 4,22,875/- for 4,975 qtls. of sugar lost in a fire at their godown. The fire was confirmed to have occurred due to short circuiting. Despite several visits by the Range Officer, the party failed to ascertain the actual loss promptly. The claim for remission was based on the loss of sugar due to the fire accident.

Issue 2: Rejection of Remission Claim by the Commissioner of Central Excise:
The Commissioner issued a show cause notice questioning the remission claim, citing reasons such as the fire being due to short circuiting, discrepancies in the claimed loss value compared to insurance settlement, and the failure to allow verification of the loss by Central Excise officers. The Commissioner ultimately rejected the remission claim for 4,975 qtls. of sugar, emphasizing the lack of proper verification and substantiation of the claimed loss by the appellants.

Issue 3: Appeal Against the Commissioner's Order:
The appeal challenged the Commissioner's decision to reject the remission claim. The appellate tribunal noted that despite repeated visits and requests, the party did not inform the Range Officer about the actual loss or allow verification. The tribunal highlighted the settlement of the loss by the insurance company, indicating that the loss was ascertainable. It emphasized the duty of the Departmental Authorities to verify such losses, which the appellants failed to facilitate. Consequently, the tribunal upheld the Commissioner's findings and rejected the appeal, stating that the claim for remission of duty remained unsubstantiated under Rule 49 of the Central Excise Rules, 1944.

This detailed analysis of the judgment highlights the sequence of events, the grounds for rejection of the remission claim, and the tribunal's decision based on the failure to provide proper verification and substantiation of the claimed loss.