2008 (10) TMI 60 - AT - Central Excise

Whether theft or dacoity would be unavoidable accident within the meaning of Rule 49 of CER so as to merit remission of excise duty on the goods so lost - Theft/dacoity are not a natural cause therefore, held that theft or dacoity cannot be called unavoidable accident within the meaning of the Rule 49 of the Central Excise Rules, 1944 and the goods lost in theft or dacoity would not be eligible for remission

Summary

Issues:
Interpretation of Rule 49 of the Central Excise Rules, 1944 regarding remission of excise duty on goods lost due to theft or dacoity.

Analysis:
1. The case involved a dispute over whether theft or dacoity would qualify as an unavoidable accident under Rule 49 of the Central Excise Rules, 1944 for remission of excise duty on lost goods.
2. The appellant, a manufacturer of copper sheets and circles, faced a dacoity resulting in the theft of approximately 18,040 kgs of brass/copper billets and sheets, seeking remission of duty on the remaining quantity.
3. The appellant argued that theft or dacoity should be considered an unavoidable accident under Rule 49, citing relevant legal precedents to support their position.
4. The Revenue contended that theft or dacoity do not constitute accidents like fire or natural disasters, as the stolen goods enter the market for consumption illegally, making the manufacturer liable for duty payment.
5. The legal framework under Section 3, 5, and 5A of the Central Excise Act establishes the levy and collection of excise duty, providing for remission in cases of goods lost due to natural causes.
6. The Tribunal analyzed the provisions of Rule 49, emphasizing that remission can be claimed for goods lost or destroyed by natural causes or unavoidable accidents, with the duty payable on goods cleared for consumption.
7. The Tribunal highlighted the distinction between loss due to theft or dacoity and loss by natural causes, emphasizing that theft does not qualify as an unavoidable accident under the rule.
8. Referring to legal definitions and precedents, the Tribunal concluded that theft or dacoity, being intentional acts, cannot be categorized as unavoidable accidents, thereby denying remission of duty on goods lost in such circumstances.
9. Upholding the Revenue's position, the Tribunal ruled that theft or dacoity does not fall under the purview of unavoidable accidents as per Rule 49, deciding in favor of the Revenue and against the appellant.
10. The Tribunal directed the case to be returned to the regular Bench for final disposal following the judgment delivered on October 17, 2008.