2005 (1) TMI 507 - AT - Central Excise

Summary

Issues:
1. Duty remission request due to goods destroyed in fire.
2. Interpretation of liability to pay duty under Central Excise Rules.

Analysis:
1. The case involves a request for remission of duty by the manufacturer of goods falling under Heading No. 39.23 of the Central Excise Tariff. A fire incident at the factory premises resulted in the loss of products and inputs. The appellant requested the Commissioner to remit the duty, emphasizing that as the goods were lost in the fire and not removed from the factory, the duty should not be recoverable. The Commissioner of Appeals acknowledged the accidental nature of the fire and noted that the competent authority to grant duty remission is the Commissioner of Central Excise. The appellant's requests to the Commissioner were considered as informal prayers for remission, indicating that the request was pending before the concerned authority.

2. The Commissioner (Appeals) highlighted the distinction between liability to duty and liability to pay duty under Rule 9 and 49 of the Central Excise Rules. It was clarified that duty becomes payable only when the excisable goods are issued out of the factory, emphasizing that duty liability and duty payment are separate concepts. In this case, since the goods were destroyed in the fire and not issued out of the factory, the appellant was deemed entitled to remission. The judgment emphasized that without a decision on the remission request by the Commissioner concerned, determining the duty by the Adjudicating Authority would not align with the legal framework. Therefore, the impugned order was set aside, and the case was remanded to the Adjudicating Authority with directions to first consider the remission request before determining the duty amount, ensuring compliance with the rules and regulations governing duty liability in such circumstances.