2012 (6) TMI 463 - AT - Central Excise

Remission of duty - loss of goods due of fire - Demand imposed on assumption that appellants have claimed insurance loss on goods, semi-finished goods and waste and combined due to fire whereas no duty is paid on the said goods - Held that - Demand of duty is linked with the remission of duty. Undisputedly the application for remission of duty is not yet decided, hence, case is remanded to lower adjudicating authority to decide the issue after the disposal of the application for remission. Since case pertains to year 1986-87, Commissioner is directed to dispose of remission application within 4 months from the date of receipt of this order and lower adjudicating authority should decide the demand cum Show Cause Notice within 1 month from the date of disposal of the remission application.

Summary

Issues:
- Appeal against Order-in-Appeal rejecting appeal and upholding demand of duty and penalty under Central Excise Rules, 1944.
- Contention regarding goods not being finished goods and application for remission of duty.
- Dispute over timing of remission application and classification of goods as finished goods.
- Decision to remand the case for lower adjudicating authority to decide after remission application disposal.

Analysis:
The appeal was filed against an Order-in-Appeal rejecting the appeal and confirming the demand of duty and penalty under the Central Excise Rules, 1944. The appellant, engaged in manufacturing jute products, claimed an insurance loss due to fire on goods, semi-finished goods, and waste. The department initiated proceedings as duty was not paid on the goods, and no application for remission was made. The lower adjudicating authority confirmed the demand and imposed a penalty. The appellant contended that the goods were not finished goods, thus no duty was applicable. They also mentioned filing an application for remission of duty after the adjudication. The department argued that the remission application was filed after the adjudication and showed the goods as finished goods. The Tribunal found the demand of duty linked with the remission issue, which was pending. Therefore, the case was remanded to the lower adjudicating authority to decide after the remission application's disposal. The Tribunal directed the Commissioner to dispose of the remission application within four months and the lower adjudicating authority to decide the demand within one month from the remission application's disposal. The appeal was disposed of accordingly.