2007 (3) TMI 653 - AT - Central Excise

Summary

Issues involved: Determination of duty on finished goods destroyed in a fire incident.

Summary:
The appellant, engaged in manufacturing S.O. Dyes, experienced a fire accident in their factory due to a short circuit, resulting in the destruction of goods, including finished products. The jurisdictional Superintendent was promptly informed, and officers confirmed the destruction through a Panchnama. The dispute in the appeal pertains to the duty on the finished goods destroyed in the fire.

The contention arose as the duty on the destroyed finished goods was not remitted by the appellant, leading to the rejection of the claim. The authorities argued that once goods are manufactured, duty liability arises, regardless of clearance. However, the appellant argued that duty payment is deferred until goods are cleared, and since the destroyed goods were not cleared, duty confirmation was unwarranted.

Referring to precedents, the Tribunal cited the case of I.G. Petrochemicals v. CCE, Mumbai, where non-filing of a remission application for destroyed goods did not automatically confirm duty demand. Similarly, in U.P. State Sugar Corpn. Ltd. v. CCE, Meerut, it was held that destruction of goods unfit for consumption without a remission application does not attract excise duty liability.

Applying the principles from these cases to the current scenario, the Tribunal found no dispute regarding the destruction of goods in the fire. The absence of a remission application was deemed a procedural requirement, and since the destroyed goods were not cleared, confirming duty demand was deemed unjustified. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.