2017 (9) TMI 1625 - AT - Central Excise

Remission of duty - Rule 21 of Central Excise Rules 2002 - goods lost in fire accident - rejection of claim on the ground that the appellant did not take reasonable steps to avoid the accident of fire in their factory - Held that - fire took place in their factory premises due to short circuit as is the reason given by the Chief Fire Officer in his report who himself has stated that the fire took place due to electricity and reason of the fire is due to ignorance of the appellant. Fire due to short circuit is unavoidable due to improper voltage supplied by the Electricity Department or due to electricity failure - The same is unavoidable by taking all reasonable measures to avoid fire. The fire took place in the factory premises of the appellant was beyond their control - claim of remission of duty cannot be rejected - appeal allowed - decided in favor of appellant.

Summary

Issues:
Claim of remission of Central Excise duty under Rule 21 of Central Excise Rules, 2002 denied due to fire accident in factory premises.

Analysis:
The appellant filed a remission application after a fire accident destroyed finished goods and raw material in their factory premises. The Adjudicating Authority denied the claim of remission, stating that the appellant did not take reasonable steps to avoid the fire accident as per the report of the Chief Fire Officer. The appellant contended that the fire was caused by a short circuit, which was unavoidable, and not due to negligence. The appellant relied on a decision of the Hon'ble CESTAT Bench of Delhi in a similar case to support their argument.

Upon hearing both parties and examining the facts, it was established that the fire was indeed caused by a short circuit, which is beyond the control of the appellant. The Chief Fire Officer's report confirmed that the fire occurred due to electricity and the appellant's ignorance, not negligence. The Tribunal held that a fire caused by a short circuit, due to factors like improper voltage supply or electricity failure, is unavoidable even with all reasonable precautions in place. Therefore, the Tribunal concluded that the fire was beyond the appellant's control, and the claim for remission of duty should not have been rejected. As a result, the impugned order was set aside, and the appeal was allowed with consequential relief.