2015 (10) TMI 1189 - AT - Central Excise

Remission of duty - Goods destroyed in fire - Held that - Larger Bench of the Tribunal, by miscellaneous order 2014 (11) TMI 579 - CESTAT AHMEDABAD answered the reference in favour of the appellant. It has been held that in cases where goods removed from factory for export under Bond are destroyed before export due to unavoidable accident, then in such situation the goods destroyed are to be treated as having been destroyed before removal in terms of Rule 21 of Central Excise Rules, 2002. - Impugned order cannot be sustained - Decided in favour of assessee.

Summary

Issues:
Remission of duty for goods destroyed by fire under Rule 21 of the Central Excise Rules, 2002.

Analysis:
The judgment pertains to an appeal against the rejection of an application for remission of duty for goods destroyed by fire under Rule 21 of the Central Excise Rules, 2002. The Commissioner of Central Excise, Ahmedabad-I had initially rejected the appellant's application. The Tribunal directed the papers to be placed before the Hon'ble President to consider whether the issue should be referred to the Larger Bench due to conflicting decisions by different Tribunals. The dispute centered around the interpretation of Rule 21 in the context of goods removed from the factory for export but destroyed before actual export. The appellant argued that since the goods were destroyed before being loaded for export, they should be entitled to remission of duty, citing the extension of place of removal up to the port area in case of export goods. The appellant also relied on the provisions of Section 5 of the Central Sales Tax to support their contention.

Subsequently, the Larger Bench of the Tribunal answered the reference in favor of the appellant. The Larger Bench held that in cases where goods removed from the factory for export under Bond are destroyed before export due to an unavoidable accident, such goods are to be treated as having been destroyed before removal in terms of Rule 21 of the Central Excise Rules, 2002. As a result of the decision by the Larger Bench, the impugned order rejecting the appellant's application for remission of duty was set aside. The appeal filed by the appellant was allowed with consequential relief, thereby overturning the initial decision of the Commissioner of Central Excise, Ahmedabad-I. The judgment emphasizes the importance of considering the specific circumstances of goods destroyed before export in determining eligibility for remission of duty under Rule 21.