2009 (6) TMI 801 - AT - Customs

Demand - Goods destroyed in fire - Held that - no duty could be demanded on the materials intended for use in the factory, when they were destroyed by fire accident - appeal allowed - decided in favor of appellant.

Summary

Issues:
Import of wastepaper under concessional rate of duty, submission of end-use certificate, destruction of goods by fire, demand for differential duty, interpretation of exemption notification.

Analysis:
The appeal was filed against an order passed by CC & CE (Appeals), Visakhapatnam, regarding the import of 235.807 MTs of wastepaper under a concessional rate of duty. The notification required the submission of an end-use certificate, which was provided for a quantity of 185.236 MTs, while the remaining 50.57 MTs were destroyed by fire in Kakinada. The Revenue demanded differential duty for the destroyed quantity, leading to the appellants approaching the Commissioner (Appeals) for relief, which was denied. The appellants then appealed to the Tribunal.

The appellant argued that the end-use condition of the notification should not apply due to the goods being lost in a fire accident, citing relevant case laws to support their position. The Department, represented by the ld. DR, contended that the end-use certificate was mandatory for availing the exemption notification, and in its absence, duty was rightfully demanded.

Upon reviewing the case records, the Tribunal noted that the goods were imported duty-free under a specific notification. It was established that no end-use certificate could be produced for the 50.571 MTs destroyed by fire. The Tribunal referred to previous case law where goods intended for specific use and destroyed by fire were considered to fulfill the end-use condition, leading to no duty being demanded. The Tribunal highlighted the principle that duty cannot be imposed on materials intended for use in a factory when destroyed by fire accident, as seen in previous decisions. Consequently, the Tribunal set aside the demand for duty, allowing the appeal in favor of the appellants.

In conclusion, the Tribunal ruled in favor of the appellants, emphasizing that the destruction of goods by fire accident exempted them from the duty demand, as the intention to use for the specified purpose was deemed sufficient, in line with previous legal precedents.