2017 (2) TMI 1488 - AT - Central Excise

Remission of duty - Burglary - Cigarettes - It is the contention of the appellant assessee that since the goods have been lost on account of burglary before the clearance of the same from the factory, remission of duty should be granted under Rule 21 of the Central Excise Rules - HELD THAT - Commissioner (A) has declined to consider the request of the appellant for grant of remission for the reason that this is not the subject matter of the proceedings before him. Further the appellant has lodged an FIR with the Police Department alleging theft in his factory. It is also likely that police by now would have concluded the investigations into the allegation of burglary and their conclusion may be available. In the show cause notice as well as order in original the main allegation which has been considered and discussed is that the appellant has clandestinely cleared the goods and hence will be liable to pay the Central Excise duty thereon. The proper authority to consider the remission of duty in respect of goods lost in terms of Rule 21 of the Central Excise Rules will be the Jurisdictional Commissioner of Central Excise. The Commissioner (A) has concluded that from the evidence on record no case of clandestine clearance has been made out against the appellant. It is not known whether the appellant has already approached the Jurisdictional Commissioner for grant of remission of duty under rule 21 in respect of goods which they have claimed to have been lost in burglary. Since the duty liability on the cigarettes found missing in the factory is intricately connected to the claim for remission of duty, the entire case needs to be re-examined. Case remanded to the Jurisdictional Commissioner for a denovo decision in the matter - Appeal allowed by way of remand.

Summary

Issues:
1. Challenge to setting aside of penalty on the assessee and its Director.
2. Challenge to the confirmation of demand of duty.
3. Request for remission of duty under Rule 21 of the Central Excise Rules.
4. Allegation of clandestine removal of goods without payment of duty.
5. Proper authority to consider remission of duty.
6. Re-examination of the case in light of claims of goods lost in burglary.

Analysis:

1. The appeals arose from an order setting aside penalties imposed on the assessee and its Director while confirming the duty demand. The assessee, engaged in cigarette manufacturing, faced a duty demand of &8377; 19,52,225 due to missing stock post-burglary. The Commissioner (A) set aside penalties but upheld the duty demand, leading to appeals from both parties.

2. The assessee challenged the duty demand, citing Rule 21 for remission due to goods lost in burglary. The Revenue contested the penalties' setting aside and duty confirmation by the Commissioner (A).

3. The Commissioner (A) found no evidence of clandestine removal of goods, favoring the appellant due to lack of proof. The appellant's counsel argued for remission under Rule 21, citing relevant case laws.

4. The Commissioner (A) did not consider the remission request, directing the matter to the Jurisdictional Commissioner for re-examination. The main allegation of clandestine clearance was dismissed, and the recovered goods may impact duty liability.

5. The case was remanded to the Jurisdictional Commissioner for a fresh decision considering the claims of goods lost in burglary. The Commissioner was instructed to finalize the matter within three months.

6. The impugned order was set aside, and the case was remanded for a new decision. Both Revenue and appellant appeals were disposed of accordingly.

This detailed analysis covers the issues raised in the judgment, providing a comprehensive understanding of the legal proceedings and outcomes.