2004 (4) TMI 435 - AT - Central Excise

Summary

Issues:
1. Duty demand confirmation and penalty imposition based on fire incident
2. Rejection of remission claim and subsequent legal proceedings

Issue 1: Duty demand confirmation and penalty imposition based on fire incident

The case involves an application for waiver and stay arising from the Commissioner's order confirming a duty demand of Rs. 60,34,988/- due to a fire incident in the factory resulting in the destruction of plastic moulded furniture. The Commissioner imposed a penalty of Rs. 6 lakhs on the applicants due to alleged negligence in fire prevention measures. The Tribunal noted the sequence of events, including the rejection of the remission claim, subsequent appeals, and the issuance of fresh notices. The Tribunal observed that the demand notice proposed duty recovery based on goods being removed without payment of duty, while the duty confirmation was linked to alleged negligence in fire safety measures. It was highlighted that the applicants had been allowed to store finished goods outside the bonded store room without permission for the month of March 2001. The Tribunal found a prima facie case that the impugned order exceeded the scope of the show cause notice and dispensed with the pre-deposit of duty and penalty, staying the recovery pending the appeal.

Issue 2: Rejection of remission claim and subsequent legal proceedings

The applicants had initially applied for remission of duty on goods destroyed in the fire, which was rejected by the Commissioner. This rejection led to a series of legal actions, including appeals and the Tribunal's intervention. The Tribunal's detailed analysis highlighted the timeline of events, the grounds for rejection, and the subsequent rejections of the remission claim. Notably, the Tribunal found merit in the applicants' argument that the duty demand confirmation and penalty imposition went beyond the scope of the original show cause notice. The Tribunal considered the permissions granted to the applicants to store goods outside the bonded store room as a relevant factor in assessing the negligence aspect. Ultimately, the Tribunal concluded that a strong prima facie case existed, leading to the decision to dispense with the pre-deposit of duty and penalty, along with staying the recovery pending the appeal process.

This comprehensive summary provides a detailed analysis of the legal judgment, covering the issues of duty demand confirmation, penalty imposition, rejection of remission claim, and the subsequent legal proceedings in a structured and informative manner.