2014 (12) TMI 444 - HC - Customs

Remission of duty - Lost goods - Denial on the ground that many transactions, viz. sale, transfer from tank to tank and re-export, have taken place on different dates and therefore, it was difficult for the supervising officers to exactly pin point the exact quantity involved in such transactions and further, it was stated that there was always a possibility of oil remaining in the pipeline during the Preventive officer s inspection which could have been brought to the notice subsequently - Tribunal allowed remission of duty - Whether the Tribunal had committed an error of law in holding that the Tribunal has also examined the provisions of Section 23 of Customs Act that it is against the provisions embedded in Customs Act - Held that - In that process, there appears to have been a loss of 51.971 M.Ts. which works out to 0.58% of the total quantity imported. When the importer made a request to the department claiming remission, the authorities did not dispute the transactions narrated above. In fact, in their reply dated 14-8-2002, they have admitted all the transactions and had also stated that it is difficult for the supervising officer to exactly pin point the quantity precisely as there is always a possibility of oil remaining in the pipeline during the Preventive Officer s inspection. Tribunal, after considering the factual situation, was satisfied that the explanation given by the importer was reasonable and appropriate. Thus, taking note of the factual findings recorded by the Tribunal, we find no ground to interfere with the said order - Decided against Revenue.

Summary

Issues:
1. Appeal against denial of remission of duty on lost goods under Section 23 of the Customs Act, 1962.
2. Interpretation of provisions of Section 23 by the Customs, Excise and Service Tax Appellate Tribunal.
3. Challenge to the Tribunal's decision on remission eligibility.

Analysis:
1. The case involved an appeal by the Revenue against a Final Order passed by the Customs, Excise and Service Tax Appellate Tribunal regarding remission of duty on lost goods. The importer sought remission after losing a quantity of goods during transactions involving import, sale, transfer, and re-export. The Assistant Commissioner initially denied remission, leading to an appeal by the importer before the Commissioner of Customs (Appeals).

2. The First Appellate Authority rejected the importer's appeal, prompting a further appeal to the Customs, Excise and Service Tax Appellate Tribunal. The Tribunal allowed the appeal, stating that the importer had reasonably explained the loss of goods, making them eligible for remission. The Revenue challenged this decision, questioning the Tribunal's interpretation of Section 23 of the Customs Act, 1962.

3. Section 23 of the Customs Act allows for remission of duty on lost or destroyed goods before clearance for home consumption. The importer detailed the series of transactions involving the imported goods and explained the loss incurred during re-export. The Tribunal, after reviewing the facts, found the importer's explanation valid and upheld the eligibility for remission. The High Court, upon examination, found no grounds to interfere with the Tribunal's decision, leading to the dismissal of the appeal by the Revenue.