2017 (10) TMI 1632 - AT - Central Excise

Remission of Central Excise Duty - remission denied on the ground that the guidelines contained in Supplementary Instructions of 2005 in the Central Excise Manual issued by the Central Board of Excise Customs mandating that a copy of FIR be filed within twenty-four hours of the incident with the officer in charge of the Range had not been complied with - sufficient reason for denial of the claim for remission present or not - HELD THAT - The authority to grant remission is the Commissioner of Central Excise who is also required to be satisfied that the destruction was owing to unavoidable circumstances. The impugned order has rendered a clear finding of adequate care not having been taken by the appellant. In the grounds of appeal nothing has been brought on record to convince that the finding in the impugned order is erroneous. It is also amply clear that the appellant has without justifiable cause delayed the filing of intimation. It is not without reason that the guidelines prescribed in Supplementary Instruction 2005 require lodgement of FIR within twenty-four hours of accident. Mere lodgement of FIR immediately after incident and filing claim for insurance claim is no substitute for ascertainment of revenue implication which are triggered only upon intimation to the jurisdictional office which was not done. Insurance payment is no proof of accidental occurrence which is a necessary statutory pre-requisite for grant of remission. Remission is a special privilege that is accorded only in the prescribed circumstance as goods become leviable to duty immediately upon manufacture. There is no reason to interfere with the impugned order - Appeal dismissed.

Summary

Issues: Claim for remission of central excise duty on goods destroyed by fire, compliance with guidelines for remission, denial of remission due to lack of reasonable care, delay in filing intimation, fulfillment of conditions for remission under Central Excise Rules, 2002, authority of Commissioner of Central Excise to grant remission, unavoidable circumstances for destruction, delay in filing FIR, insurance claim not a substitute for revenue implication, special privilege of remission.

The judgment by the Appellate Tribunal CESTAT MUMBAI dealt with a case where the appellant, M/s. Suyash Laboratories Ltd., claimed remission of central excise duty on goods destroyed by fire. The remission was denied due to non-compliance with guidelines mandating the filing of an FIR within 24 hours of the incident. The Commissioner of Central Excise found the appellant had not exercised reasonable care and protection, leading to the denial of the remission claim.

The appellant argued that the conditions under Rule 21 of Central Excise Rules, 2002 had been fulfilled, and the authority to grant remission, the Commissioner of Central Excise, should have been satisfied that the destruction was due to unavoidable circumstances. However, the impugned order clearly stated that adequate care was not taken by the appellant, and there was a delay in filing the intimation, which is a crucial step as goods become leviable to duty immediately upon manufacture.

The tribunal noted that the appellant's delay in filing the intimation and relying solely on an insurance claim without considering the revenue implications did not meet the requirements for remission. The guidelines in Supplementary Instruction 2005 emphasize the importance of immediate reporting to the jurisdictional office, which the appellant failed to do. The tribunal emphasized that remission is a special privilege granted only under specific circumstances, and the appellant's actions did not justify the grant of remission.

Ultimately, the tribunal found no reason to interfere with the impugned order, concluding that the appeal lacked merit and was dismissed. The judgment underscores the significance of timely compliance with procedural requirements and the need for justifiable cause in claiming remission of duties, highlighting the stringent conditions that must be met for the grant of such special privileges in excise matters.