2006 (6) TMI 380 - AT - Customs

Remission of duty - Destruction of goods by fire accident in warehouse - 100% EOU - HELD THAT - A perusal of Section 23(1) reveals that in order to claim remission of duty, the important condition is that it should be shown to the satisfaction of the Assistant Commissioner or the Deputy Commissioner that the imported goods have been lost or destroyed at any time, before clearance for home consumption. If the loss is because of pilferage, remission would not be applicable. In the instant case, the goods have been warehoused. Goods which are warehoused undoubtedly have not been cleared for home consumption. In the Jindal Vijayanagar case, we have held that remission of duty is applicable to warehoused goods. The other case-laws relied on by the learned Advocates are also relevant. Revenue has not shown that the goods have been destroyed because of pilferage. The fact of the fire accident is not under dispute. Therefore, all the conditions for claiming remission u/s 23(1) have been fulfilled. The appellants are entitled for the entire duty paid on the goods. Moreover, the non-fulfilment of conditions of the Notifications mentioned by the Commissioner is also not relevant in the case of remission of duty. The discrepancy between the value shown in the insurance claim and what was informed to the Customs cannot be a valid ground for rejection of the claim for remission in the light of Section 23 of the Customs Act, 1962 and also the decision of the Tribunal in the CCE v. Welspun Terri Towels case 2001 (11) TMI 200 - CEGAT, MUMBAI . In fine, we allow the appeal with consequential relief.

Summary

Issues involved: Appeal against OIO 32/2005 passed by the Commissioner of Customs, Bangalore regarding remission of duty under Section 23 of the Customs Act, 1962 for goods destroyed in a fire accident.

Summary:
The appellants, a 100% EOU, imported duty-free materials which were destroyed in a fire accident. The dispute arose when the Commissioner confirmed the demand of duty in respect of the destroyed goods obtained duty-free. The Commissioner held that Section 23 would not apply to warehoused goods and that the appellants did not satisfy the conditions of the relevant Customs Notifications. The appellants challenged this decision strongly.

The learned Advocates argued that Section 23 is applicable to the present case as it allows remission of duty for imported goods lost or destroyed before clearance for home consumption, without mentioning due precaution for warehoused goods. They cited relevant case laws to support their argument. They also contended that the Notifications and Section 72 mentioned by the Commissioner were not relevant for remission. The Commissioner's reliance on the Pasupathi Overseas case was deemed irrelevant as the present case involved a fire accident, not vague grounds for remission.

After careful consideration, the Tribunal found that all conditions for claiming remission under Section 23(1) had been fulfilled in this case. The goods were not cleared for home consumption, and there was no evidence of pilferage causing the loss. The discrepancy between the insurance claim and Customs declaration was not a valid ground for rejection of the remission claim. Therefore, the appeal was allowed with consequential relief, granting the appellants the remission of duty paid on the destroyed goods.