2009 (3) TMI 795 - AT - Central Excise

Summary

Issues:
Remission of duty on stolen excisable goods under Rule 21 of Central Excise Rules, 2002.

Analysis:

The Appellate Tribunal CESTAT, Kolkata, heard the appeal regarding the remission of duty sought by the appellants for excisable goods stolen from the factory. The demand for duty was confirmed after rejecting the remission request under Rule 21 of the Central Excise Rules, 2002. The appellants argued that the theft constituted an unavoidable accident, citing a decision of the Hon'ble Calcutta High Court. On the other hand, the Revenue relied on a judgment of the Hon'ble Madras High Court, which held that the loss of non-duty paid goods due to theft is not considered an accident or unavoidable. The Tribunal noted the conflicting decisions and analyzed whether theft qualifies as an unavoidable accident under the Central Excise Rules.

Upon reviewing the case, the Tribunal found that the dispute centered on whether theft could be classified as an unavoidable accident as per Rule 21 of the Central Excise Rules, 2002. The appellants referenced the Calcutta High Court's decision, while the Revenue relied on the Madras High Court's ruling. The Madras High Court, in the case of M/s. Golden Hills Estates, specifically addressed the issue of theft not being categorized as an unavoidable accident under the rules. The Tribunal noted that the Madras High Court disagreed with the Calcutta High Court's perspective on this matter. Consequently, the Tribunal followed the Madras High Court's decision and dismissed the appeal, emphasizing that theft does not fall under the definition of an unavoidable accident as outlined in the Central Excise Rules, 2002.

In conclusion, the Tribunal based its decision on the interpretation of whether theft constitutes an unavoidable accident for the purpose of seeking remission of duty under Rule 21 of the Central Excise Rules, 2002. By aligning with the Madras High Court's ruling, the Tribunal determined that theft does not qualify as an unavoidable accident, thereby denying the appellants' request for remission of duty on the stolen goods. The appeal was dismissed, and the stay petition was also disposed of accordingly.