2013 (1) TMI 446 - AT - Customs

Remission of duty Whether remission of duty can granted - where goods destroyed in bonded warehouse - and out of charge order was given before fire took place - Physical clearance for home consumption - Bonding bill of entry - Ex-bond bill of entry for ex-bonding the goods Held that - Yes, following the decision in case of MOUNT SHIVALIK BREWERIES LTD. (2003 (1) TMI 120 - HIGH COURT OF DELHI) that sub-section (1), with which we are concerned herein provides for remission of duty , where goods are lost or destroyed at any time before clearance of goods for home consumption. Unlike sub-section (2), this subsection does not use the expression before an order for clearance of goods for home consumption has been made. Obviously, there is a distinction between an order for clearance for home consumption and clearance for home consumption , inasmuch as in our opinion, the latter expression postulates actual clearance of the goods for home consumption from the Customs custody after an order for clearance for home consumption is made. Therefore, the assessee are entitled to remission of duty paid on the goods lost or destroyed by fire at any time before physical clearance of the goods for home consumption. In favour of assessee Double benefit of duty Remission of duty Goods lost by fire - Insurance of goods - Goods were insured by a comprehensive insurance policy , therefore, the assessee shall get the double benefit of duty both from the bonded warehouse and from the department Held that - Following the decision in case JINDAL VIJAYANAGAR STEEL LTD. (2005 (11) TMI 151 - CESTAT, BANGALORE) had clearly spelt out that if the goods are insured, it does not disentitle the assessees from the claim of refund of duty and interest paid thereon. In favour of assessee

Summary

Issues:
1. Remission of duty on goods destroyed in fire before physical clearance for home consumption.
2. Entitlement to remission of duty when goods are destroyed before physical clearance.
3. Claiming dual benefit on duty paid amount.

Analysis:

Issue 1: Remission of duty on goods destroyed in fire before physical clearance for home consumption
The appeal was filed by the Revenue against the order granting remission of duty by the first appellate authority due to the destruction of goods in a fire before physical clearance. The respondents imported goods and filed a bonding bill of entry. Despite paying duty and filing an ex-bond bill of entry, the goods were destroyed in a fire before physical clearance. The respondents then sought remission of duty, which was initially rejected but granted by the first appellate authority. The main contention was whether the remission of duty is admissible in such circumstances.

Issue 2: Entitlement to remission of duty when goods are destroyed before physical clearance
The Revenue argued that since the goods were destroyed after 'out of charge' was given but before physical clearance, remission of duty should not be granted. They cited a previous Tribunal decision to support their stance. However, the respondents relied on a High Court judgment stating that remission of duty is admissible even if goods are destroyed before physical clearance. The Tribunal analyzed the Customs Act, which allows remission of duty on goods lost or destroyed before clearance for home consumption. The Tribunal upheld the respondents' entitlement to remission of duty based on the High Court judgment and the provisions of the Customs Act.

Issue 3: Claiming dual benefit on duty paid amount
The Revenue further argued against granting dual benefit on duty paid amount, claiming that the goods were insured. However, the respondents cited a Tribunal decision stating that being insured does not disentitle them from claiming a refund of duty and interest. The Tribunal agreed with the respondents, emphasizing that being insured does not prevent them from seeking remission of duty. Therefore, the Tribunal dismissed the Revenue's appeal and upheld the order granting remission of duty to the respondents.

In conclusion, the Tribunal ruled in favor of the respondents, allowing remission of duty on the goods destroyed in the fire before physical clearance for home consumption and dismissing the Revenue's appeal.