2008 (3) TMI 117 - AT - Central Excise

Remission of duty on the damaged goods - cement got solidified and became unfit for marketing as the same was damaged in the heavy rains - finished goods got damaged owing to natural causes and that the remission sought by the assessee has to be allowed - Commissioner is not justified in attributing the damage to the failure of the assessee to safeguard excisable goods on which duty was payable remission allowed

Summary

Issues: Duty remission on damaged goods due to natural causes.

Analysis:
The case involved a dispute regarding the remission of duty on damaged goods due to natural causes. The appellant filed an application for remission of duty on a quantity of cement that got solidified and became unfit for marketing after being damaged in heavy rains. The Commissioner attributed the damage to the failure of the assessee to safeguard excisable goods, demanding duty, interest, and imposing a penalty. The Range Officer and an engineer certified the damage suffered by the cement. The Commissioner found the contention of the assessee not sustainable, holding them responsible for the damage.

Upon hearing both parties, the Tribunal considered the unprecedented intensity of rains in Tamil Nadu during the relevant period. The appellant's counsel argued that the damage to the goods was due to natural causes beyond the control of the assessee, resulting in a loss of over Rs. 5 lakhs. The Tribunal agreed that the finished goods were not left to nature's whims by the assessee and that the damage was caused by natural events. Consequently, the Tribunal allowed the appeal, granting the remission sought by the assessee. The decision was based on the understanding that the damage was a result of natural causes and not due to negligence on the part of the assessee.