2015 (10) TMI 1985 - AT - Central Excise

Remission of duty - Goods destroyed in fire accident - Non intimation to the Department within 24 hrs - Appellant failed to take necessary steps to avoid fire accident - Appellant has not produced the evidence whether they have availed the duty element in the claim from Insurance company or not - Held that - fire continued from 17th to 18th April 2002. Only on 19th April 2002 appellant could have intimated to the Department but inadvertently they failed to intimate the Department. As 20th and 21st April were holidays, therefore, appellant could intimate to the Department only on 22.04.2002. Not giving intimation on 19th April will not be fetal for claim of remission of duty when it is the fact on record that fire took place in the premises of the appellant. Therefore, claim of remission of duty cannot be denied on this ground. In the fire accident the factory building, capital goods and all excisable goods have been lost. No prudent men would invite fire accident to avoid payment of excise duty. It is a fact on record that fire accident took place due to short circuit in electric wire. The, short circuit in electric wire is not in the hand of a man who could avoid such accident. Therefore, it cannot be the reason that appellant failed to take necessary steps to avoid fire accident. Therefore, on this ground also claim of remission of duty cannot be denied. Appellant has produced the document on record that insurance company has not sanctioned the amount of duty as claim of insurance to the appellant. In these circumstances, it cannot be said that appellant has received duty element in their insurance claim. Therefore, on this ground also claim of remission of duty cannot be denied. - appellant is entitled for claim of remission of duty. Consequently, demand of duty along with interest cannot be confirmed against the appellant and consequently, penalty is not imposable - Decided in favour of assessee.

Summary

Issues:
- Denial of claim of duty remission
- Confirmation of payment of duty and penalty

Analysis:
- The appellant appealed against the denial of the claim of duty remission and the confirmation of payment of duty and penalty. The case revolved around a fire incident in the appellant's factory where various goods were destroyed. The appellant's claim of duty remission was rejected due to alleged negligence in avoiding the fire, failure to produce evidence of recovering duty element from the insurance company, and delayed intimation to the department.
- The appellant's counsel argued that the previous dismissal of the appeal by the Tribunal was challenged in the High Court, which remanded the matter back for a fresh review. The appellant provided evidence that the insurance company did not sanction any amount towards duty in their claim, indicating that the duty element was not recovered. The cause of the fire was attributed to a short circuit, deemed an unavoidable incident beyond the appellant's control.
- The Tribunal considered the grounds for denial of duty remission. It noted that the appellant's delayed intimation to the department was due to circumstances beyond their control, as the fire occurred over a weekend. The Tribunal found it unreasonable to expect immediate intimation in such a situation. Additionally, it was established that the fire was caused by a short circuit, absolving the appellant of any negligence in preventing the incident.
- Regarding the duty element from the insurance claim, the appellant successfully demonstrated that no amount was sanctioned for duty by the insurance company. This evidence supported the appellant's claim for duty remission. Consequently, the Tribunal held that the appellant was entitled to the remission of duty. The demand for duty, interest, and penalty was set aside, and the appeals were allowed in favor of the appellant.