2010 (12) TMI 1038 - CGOVT - Central Excise

Remission of duty - loss of goods due to natural causes - revision application - goods were stored in their registered premises wherein a theft is reported to have taken place resulting in loss of indigenous goods and imported goods - Theft of goods cannot be treated as loss due to natural causes can be due to negligence on the part of the applicant - remission of duty was not available on loss of warehoused goods Revision application is rejected being devoid of merit

Summary

Issues:
1. Recovery of duty on procured goods not used for intended purpose.
2. Appeal against rejection of remission claim for goods lost due to theft.
3. Interpretation of Rule 21 of the Central Excise Rules, 2002 regarding remission of duty.
4. Timeliness of filing revision application and condonation of delay.

Analysis:
1. The case involved a 100% EOU that procured excisable and imported goods duty-free for manufacturing export goods, with a theft resulting in loss of goods. The lower authorities issued a show cause notice for recovery of duties as the goods were not used for the intended purpose. The applicant's appeal was rejected by the Commissioner (Appeals), leading to a revision application under Section 35EE of the Central Excise Act, 1944. The applicant argued that the decisions relied upon were distinguishable, and the theft constituted an unavoidable accident, frustrating their contractual obligations.

2. The applicant contended that the theft incident should have been considered under remission provisions, citing similar cases. However, the government observed that theft does not fall under Rule 21 of the Central Excise Rules, 2002, which covers loss due to natural causes only. The denial of remission by the lower authorities was upheld, emphasizing the applicant's obligations under the manufacturing in Bond Licence and related regulations.

3. Regarding the timeliness of filing the revision application, the government noted the delay in approaching CESTAT initially, which was deemed non-maintainable. However, the government, under Section 35EE of the Central Excise Act, condoned the delay as the applicant wrongly pursued the CESTAT route first. The application was considered within the permissible time frame, and the delay was condoned accordingly.

4. Ultimately, the government rejected the revision application, finding it devoid of merit. The orders of the lower authorities were upheld, emphasizing the applicant's failure to comply with the conditions of the license and regulations, leading to the duty becoming payable. The government found no reason to interfere with the lower authorities' decisions and upheld them accordingly.