2018 (3) TMI 1720 - CGOVT - Central Excise

Remission of duty - 70,000 sticks of cigarettes which were stolen from the factory of the respondent - Rule 21 of the Central Excise Rules, 2001 - Held that - The Government has examined the matter and it is found that the issue involved in the Revision application is undisputedly regarding remission of duty on the stolen cigarettes. Whereas, as per first proviso to Section 35B read with Section 35EE of the Central Excise Act, 1944, the Revision application can be filed with the Government against the O-I-A only if the order relates to a case of loss of goods, a rebate of duty of Excise on exported goods and goods exported outside India without payment of duty. The theft of the cigarettes has been committed in this case while the goods were lying in the factory in fully finished condition and, therefore, it cannot be covered in the ambit of processing loss as envisaged in clause (a) of the first proviso to Section 35B which can cover only leakage and burning loss, etc. and post-manufacturing losses such as storage loss on account of any accident or theft, etc. are not covered. Therefore, the Government considers that it does not have jurisdiction to deal with the above stated Commissioner (Appeals) s order which does not involve any issue relating to transit loss or processing loss. The Revision application is not found maintainable before the Government - Application rejected.

Summary

Issues:
Remission of Central Excise duty on stolen cigarettes.

Analysis:
The Revision Application was filed by the Commissioner of Central Excise against the Order-in-Appeal allowing remission of duty on stolen cigarettes. The respondent's request for remission was partially granted by the Assistant Commissioner, but the appeal against the rejection of remission for the remaining stolen cigarettes was allowed by the Commissioner (Appeals), leading to the current Revision application.

The grounds for the Revision application included the alleged incorrect consideration of old Rules 1944, the failure to apply Rule 21 of the Central Excise Rules 2001, and reliance on case laws related to the old Rules 1944. Despite being offered personal hearings on multiple occasions, no attendance or request for rescheduling was made, indicating a lack of interest in availing personal hearings.

The Government's examination revealed that the issue pertained to remission of duty on stolen cigarettes. However, the legal provisions specified that the Government's jurisdiction for Revision applications was limited to cases of transit loss or processing loss during transportation or processing of goods, not post-manufacturing losses like theft from a factory. As the theft occurred in the factory and not during transit or processing, the Government concluded that it lacked jurisdiction to address the Commissioner (Appeals)'s order.

Consequently, the Revision application was deemed not maintainable before the Government and was rejected based on the lack of jurisdiction to deal with issues not related to transit or processing losses as defined by the legal provisions.