2012 (2) TMI 435 - AT - Central Excise

Remission of duty - Non-observance of the procedure as recorded in the Manual - Held that - procedure as recorded in the Manual is required to be followed but in the facts and circumstances of the present case involving the product which is perishable in nature and the said fact as to be kept in a particular temperature, I am of the view that the strict non-observance of the above Rule should not be adopted as a reason for denial of the benefit otherwise available to the appellant. Admittedly, there was fire in the appellants factory, intimation about the same was given to the Revenue. Superintendent visited the factory within 4 days, subsequent destruction of the goods was in the presence of surveyor, who also issued certificate of destruction and the same was also intimated vide their letter dated 9-5-2005. In these circumstances, it will not be justifiable to deny the benefit of remission to the appellant on the sole ground of strict observance of the procedure. As such, by extending the benefit to the appellant, I set aside the impugned order of the Commissioner denying the remission - Decided in favour of assessee.

Summary

Issues:
Remission of duty on destroyed ice cream due to fire accident.

Analysis:
1. Facts of the Case: The appellants, engaged in ice cream manufacturing, faced a fire accident destroying a significant quantity of ice cream. They applied for remission of duty, but faced rejection leading to a demand notice. The Commissioner rejected the remission claim, which led to appeals by the appellants.

2. Appellant's Argument: The appellant's advocate argued that the ice cream, being perishable, was damaged by fire, and proper notifications were made regarding the quantity of damaged goods. The destruction was done in the presence of a surveyor, and they cited a relevant Tribunal case to support their stance.

3. Revenue's Argument: The Revenue representative supported the Commissioner's decision, emphasizing the necessity of following the prescribed procedures for destruction of damaged goods. They highlighted the mandatory requirement of obtaining permission for destruction in the presence of officers.

4. Legal Analysis: The judgment referred to Rule 21 of the Central Excise Rules, 2002 and Chapter 18 of the C.B.E. & C. Excise Manual of Supplementary Instructions, which outline the procedure for remission of duty and destruction of goods. The Commissioner's rejection was based on non-compliance with the prescribed procedure.

5. Judgment: The judge noted the fire incident, timely intimation, and destruction of goods in the presence of a surveyor. Despite procedural lapses, considering the perishable nature of ice cream and the specific circumstances, the judge set aside the Commissioner's order denying remission. Consequently, the subsequent demand was also set aside, and the appeals were allowed in favor of the appellants.

This detailed analysis of the judgment highlights the key arguments presented by both parties, the legal framework governing remission of duty, and the judge's rationale for overturning the Commissioner's decision in favor of the appellants.