2010 (8) TMI 240 - AT - Central Excise

Remission of duty non marketability of goods Commissioner rejected the claim on the ground of absence of evidence of non-marketability Held that - it is necessary for the adjudicating authority to take into consideration all the grounds based on which such claim is made - Merely because the goods can be sold either by way of auction or tender that cannot be a ground to refuse the claim by the manufacturer - disposal of goods by way of auction or tender process would be in any manner prejudicial to the goodwill gained by the claimant in respect of goods manufactured by them as also whether it would affect their existing market - it is for the manufacturer to decide the method which he has to choose for sale of the product manufactured - order cannot be sustained and is liable to be set aside - Matter remanded to the Commissioner

Summary

Issues:
Application for remission of duty rejected by Commissioner, Indore on grounds of goods being non-marketable; Interpretation of Rule 21 regarding remission of duty; Sufficiency of evidence required to support claim of goods being unfit for marketing.

Analysis:
The judgment revolves around the rejection of an application for remission of duty by the Commissioner, Indore, based on the claim that the goods were non-marketable. The appellants contended that Rule 21 allows for remission if goods are claimed as unfit for consumption or marketing before removal. The Commissioner held that the appellants failed to provide sufficient evidence to support their claim of unmarketability, emphasizing the need for substantiation beyond mere claims. Rule 21 specifies conditions for remission based on loss, destruction, or unfitness for consumption or marketing, with different authorities empowered to grant remission based on the duty amount involved.

The Tribunal highlighted that while the manufacturer must claim goods as unfit for consumption or marketing, the competent authority must be satisfied with the claim to grant remission. In this case, the appellants listed various reasons for the goods being non-marketable, such as poor quality, lack of demand for patterns and color, and storage issues. However, the Commissioner's order lacked analysis of the material provided by the appellants, focusing on a random survey instead. The Tribunal emphasized the need for evidence to support claims of goods being unfit for marketing.

The judgment underscored that the Commissioner must consider all grounds on which a claim is made, not just the current state of the goods. The manufacturer's decision on the method of sale, whether auction or tender, should not be grounds for refusing the claim. The Tribunal emphasized that the impact on the manufacturer's goodwill and existing market should be considered in evaluating the genuineness of the claim. Ultimately, the manufacturer has the right to choose the sales method, not the Revenue authorities.

Consequently, the Tribunal found that the Commissioner did not adequately consider the relevant aspects of the case, leading to the order's inability to be sustained. The matter was remanded to the Commissioner for a fresh decision, with instructions to consider all important points raised and allowing the appellants to present further evidence if desired. The appeal was disposed of accordingly, emphasizing the need for a comprehensive evaluation of claims of goods being unfit for marketing under Rule 21.