2007 (4) TMI 430 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 21 of Central Excise Rules, 2002 regarding remission of duty for goods found unfit for human consumption.
2. Determination of whether removal of goods from factory premises to a warehouse under bond constitutes removal for human consumption.
3. Comparison of the present case with previous Tribunal decisions for similar circumstances.

Analysis:
1. The judgment concerns the interpretation of Rule 21 of the Central Excise Rules, 2002, regarding the remission of duty for goods found unfit for human consumption. The case involves pharmaceutical goods meant for export to Russia, which were found unsuitable after testing in Russia. The manufacturer claimed remission of duty under Rule 21 as the goods were deemed unfit. However, the Commissioner of Central Excise & Customs, Nashik, did not grant remission, citing that the goods were earlier removed from the factory to the warehouse. The appellant argued that since the goods were under the custody and supervision of Customs authorities in the warehouse, Rule 21 should apply. Reference was made to a previous Tribunal decision in a similar case where the appeal was allowed, supporting the appellant's contention.

2. The second issue revolves around whether the mere removal of goods from the factory premises to a warehouse under bond constitutes removal for human consumption. The Departmental Representative argued that any removal from the factory premises, even to a warehouse, amounts to removal of the goods, and thus Rule 21 does not apply. Reference was made to a different Tribunal decision involving a 100% EOU where goods were cleared for export but misplaced during transit. In that case, it was held that such removal constituted removal from the factory, and no remission was granted. This case was distinguished from the present one.

3. Finally, the judge considered the circumstances and previous Tribunal decisions to determine that the appellants had a strong prima facie case. The judge stayed the implementation of the impugned order pending the appeal's disposal, allowing the application and listing the appeal for further proceedings. The judge's decision was based on the view that the appellants presented a compelling case warranting a stay on the implementation of the order until the appeal is resolved, indicating a favorable stance towards the appellant's arguments.

This detailed analysis of the judgment provides a comprehensive understanding of the issues addressed and the reasoning behind the decision rendered by the Appellate Tribunal CESTAT, Mumbai.