2016 (11) TMI 95 - AT - Central Excise

Remission of duty - Rule 21 of the Central Excise Rules 2002 - Held that - the issue is no more res integra being settled by Larger Bench decision of this Tribunal in the case of M/s Honest Bio-vet Pvt. Ltd 2014 (11) TMI 579 - CESTAT AHMEDABAD . This Tribunal, in the said judgment, after considering the definition of place of removal prescribed under Section 4(3)(c)(iii) of Central Excise Act, 1944, observed that the goods cleared for export under bond, if destroyed before being exported, could be considered as destruction before removal only - Appeal allowed.

Summary

Issues:
- Interpretation of Rule 21 of Central Excise Rules 2002 regarding remission of duty on goods destroyed in transit before export.

Analysis:
The appeal was filed against an order passed by the Commissioner, C.Ex. & S.Tax, Vadodara-I, rejecting the application for remission of duty on goods destroyed in transit. The Appellants, engaged in manufacturing Pharmaceutical products, had cleared goods for export to an SEZ unit, which were destroyed in an accident before reaching the destination. The Commissioner held that remission of duty could only be allowed on goods destroyed before removal, which, in this case, did not apply as the goods had already left the factory. The Appellant argued that the 'place of removal' for goods cleared for export under Bond/LUT should be the place of delivery, not the factory gate, citing a Tribunal decision in M/s Honest Bio-vet Pvt. Ltd. Vs CCE Ahmedabad-I.

The Tribunal, after examining the facts and legal provisions, found that the Appellants had cleared goods for export under bond, which were destroyed before being exported. Referring to the Larger Bench decision in M/s Honest Bio-vet Pvt. Ltd case, the Tribunal held that goods cleared for export under bond and destroyed before export could be considered as destroyed before removal. The Tribunal emphasized that this interpretation fulfills the primary condition for eligibility of remission of duty under Rule 21 of Central Excise Rules 2002. Consequently, the Tribunal set aside the Commissioner's order and allowed the appeal, granting consequential relief as per law. The judgment reaffirmed the principle that goods cleared for export under bond and destroyed before export are eligible for remission of duty, as established in the precedent case.