2014 (10) TMI 408 - AT - Central Excise

Remission of duty - Goods destroyed in fire - Held that - Whatever objections were raised by the Commissioner for denial of remission, stands duly met by the appellant. There is no dispute about the fact of fire as also about the fact of destruction of the goods. In fact the appellant has been prompt to call fire brigade immediately, inspite of taking first measured in trying to extinguish fire by way of fire extinguisher and pouring water etc. Further intimation about fire accident and loss of goods stands made by the appellant on the very next day itself. The extent of damage of goods also stands verified by Superintendent. In the wake of above admitted factual position, denial of remission of duty on mere technical ground i.e. being some difference in the occurrence of fire timing and in calling fire brigade are of no relevance. Further, I find that the appellant s claim from insurance company stands settled in their favour, by National Consumer Forum. appellants are entitled to remission of duty subject to the condition that the duty element has not been claimed from the insurance company - Decided conditionally in favour of assessee.

Summary

Issues: Appeal regarding remission of duty for destroyed goods due to fire incident.

Analysis:
1. Remission of Duty Claim: The appellant, engaged in manufacturing ceramic items, filed a remission application for duty involved in goods destroyed by a fire incident. The Commissioner rejected the remission application citing reasons like the absence of fire-fighting equipment and discrepancies in the timing of the fire incident reported by the appellant and the fire brigade. The insurance claim filed by the appellant was also rejected by the insurance company.

2. Appellant's Contentions: The appellant argued that fire-fighting equipment was indeed installed in their factory, as evidenced by an insurance report. They also clarified the discrepancy in the timing of the fire incident, stating that it does not affect the fact that the goods were destroyed in a fire. The appellant highlighted a favorable order from the National Consumer Forum directing the insurance company to pay a substantial claim amount.

3. Tribunal's Observations: After considering the arguments, the Tribunal found that the objections raised by the Commissioner for denying remission were adequately addressed by the appellant. The Tribunal acknowledged the prompt response of the appellant in calling the fire brigade and taking measures to control the fire. The Tribunal noted that the destruction of goods and the fire incident were established facts, making the denial of remission on technical grounds unjustified.

4. Decision: The Tribunal ruled in favor of the appellant, granting remission of duty, subject to the condition that the duty element was not included in the insurance claim. The matter of confirming the demand of duty was remanded to the Commissioner for further proceedings. The Tribunal emphasized the need for clarity on whether the duty element was part of the insurance claim, indicating a requirement for additional investigation by the original adjudicating authority.

5. Conclusion: Both appeals were disposed of in favor of the appellant, with the Tribunal emphasizing the importance of ensuring that the duty component was not duplicated in the insurance claim. The judgment highlighted the significance of factual evidence and prompt actions in cases involving remission of duty for goods destroyed in fire incidents.