2015 (1) TMI 719 - CGOVT - Central Excise

Remission of duty - Goods destroyed in fire after removal of goods - failure to export the goods as per provision of Notification No. 42/2001-CE(NT) dated 26.06.2001 - Held that - On a plain reading of the Rule 21(supra), it is clear that the remission of duty under the said rule is available only to the goods which have not been removed from the factory/warehouse. In the instant case, they have removed goods from manufacturer s premises and, therefore, they are not entitled for remission of goods under Rule, 21 of Central Excise Rules, 2002. - in this case goods were destroyed in fire and there is no case of willful evasion of duty on the part of applicant. As such the penalty imposed on the applicant is set aside - Decided partly in favour of appellant.

Summary

Issues:
- Failure to submit proof of export within the specified time period
- Alleged contravention of Central Excise Rules and Notification
- Denial of duty exemption under Rule 19
- Entitlement for remission of duty under Rule 21
- Imposition of penalty without confiscation
- Invocation of Section 11AC without evidence of fraud
- Penalty imposition on a partnership firm
- Applicability of case laws on duty remission

Analysis:
The revision application was filed against an Order-in-Original confirming a duty demand, interest, and penalty on the applicant for alleged contravention of Central Excise Rules. The applicant had executed a B-I General Bond for export but failed to submit proof of export within the stipulated time frame. The Deputy Commissioner imposed a duty demand of Rs. 14,329 with interest and a penalty under Rule 26. The Commissioner (Appeals) upheld the decision, leading to the revision application.

The applicant contended that all necessary export procedures were completed, including obtaining CT-1, Let Export Order, and submitting relevant documents. They argued for duty exemption under Rule 19 and remission under Rule 21 due to the goods' destruction in a fire before shipment. The applicant cited precedents supporting duty remission even for goods destroyed before export.

The Government observed that the goods were cleared for export but destroyed in a fire at the CFS, leading to the duty demand. The Commissioner (Appeals) found that Rule 21's remission of duty applies only to goods destroyed before removal from the factory, not after removal. The Government concurred, denying duty remission in this case. However, recognizing the lack of willful duty evasion, the penalty imposed on the applicant was set aside.

Regarding penalty imposition on a partnership firm, the Government noted that penalty under Rule 26 cannot be imposed on a firm, aligning with established legal principles. The Government partially allowed the revision application by setting aside the penalty but upheld the duty demand due to the goods' destruction post-removal. The case laws cited by the applicant were deemed inapplicable to the present scenario, leading to the modification of the Order-in-Appeal.