2008 (3) TMI 220 - AT - Central Excise

Excisable goods lost in fire - no material produced by the Revenue that there was a mala fide on the part of the appellants - finding of the Commissioner that the fire had occurred due to carelessness of the appellants is not justified - an accident cannot be attributed to anybody s carelessness - Once the incident reported to the authorities is accepted as an accident considerations as to whether reasonable care was taken to avoid it are totally irrelevant remission of duty is allowed

Summary

Issues:
Appeal against rejection of application for remission of duty due to fire incident.

Analysis:
The appeal was filed against the rejection of the application for remission of duty on excisable goods lost in a fire incident at the appellant's factory. The Commissioner of Central Excise had rejected the remission application citing negligence and carelessness on the part of the appellants as the cause of the fire. The appellant argued that there was no material provided by the Revenue to support this contention. The appellant relied on previous tribunal decisions to support their case, emphasizing that the cause of the fire was not established to be due to negligence. The Revenue, represented by the DR, supported the Commissioner's finding, referring to the Fire Brigade report attributing the fire to smoking with carelessness and emphasizing it was not a natural cause or accident.

Upon reviewing the case records and arguments from both sides, the Member found that while the fire did occur at the appellant's factory, there was no conclusive evidence to support the Commissioner's finding of carelessness on the appellant's part. The Commissioner's observation that the appellants failed to take reasonable care to avoid the fire was deemed unjustified. The Member noted that an accident cannot be solely attributed to carelessness. Referring to precedent cases, the Member highlighted that once an incident is accepted as an accident, considerations of reasonable care to avoid it become irrelevant in the context of examining a remission application under Rule 49 of the Central Excise Rules, 1944.

In light of the above analysis, the impugned order was set aside, and the appeal was allowed with consequential relief. The Member concluded that the finding of the Commissioner attributing the fire to the appellants' carelessness was not justified, emphasizing that an accident cannot be solely blamed on carelessness. The decision was dictated and pronounced in the open court, providing relief to the appellant against the rejection of the remission application.