2016 (11) TMI 999 - AT - Central Excise

Remission of duty - goods lost during the period from August, 2007 to August, 2008 under Rule 21 of the Central Excise Rules, 2002 - finished goods are of volatile nature - Held that - there is no dispute on the evaporation loss upon which remission of duty was claimed. The CBEC vide Circular No. 246/80/96-CX dated 01.10.1996 clarified that gasses falling under chapter 28 and 29 produced in a factory and allowed to escape in the atmosphere are not liable to duty. On the basis of the said Circular, the Tribunal allowed the remission application on identical situation as held in the case of CCE vs. B.O.C. India Ltd 2007 (5) TMI 13 - HIGH COURT ,DELHI . No reason found to reject the application for remission of duty filed by the appellant - appeal allowed.

Summary

Issues:
- Remission of duty for goods lost during a specific period under Rule 21 of the Central Excise Rules, 2002.

Detailed Analysis:
The case involved the appellants engaged in the manufacture of liquid oxygen, liquid Nitrogen, and Liquid Argon, who filed an application before the Central Excise Authorities seeking remission of duty amounting to ?8,28,147 for goods lost between August 2007 to August 2008 under Rule 21 of the Central Excise Rules, 2002. The Commissioner of Central Excise, through the impugned order, rejected the remission application. The appellant argued that the losses were due to natural causes beyond their control, particularly evaporation losses related to the volatile nature of the finished goods. The adjudicating authority relied on a report and a trade notice to suggest that the appellant could have prevented evaporation losses by implementing certain measures, such as providing coils inside the tank to control the temperature.

Upon hearing both sides and examining the records, the Tribunal noted that there was no dispute regarding the evaporation losses for which the remission of duty was sought. Referring to Circular No. 246/80/96-CX dated 01.10.1996 issued by the CBEC, which clarified that gases falling under specific chapters and produced in a factory but allowed to escape in the atmosphere are not subject to duty, the Tribunal found precedent in similar cases. Notably, the Tribunal cited judgments such as CCE, Belapur vs. Deepak Fertilizers & Petro Corporation Ltd. (2009), Jindal Praxair Oxygen Co. Pvt. Ltd. vs. C.C.E., Belgium (2007), and CCE vs. B.O.C. India Ltd (2007) to support the decision. Consequently, the Tribunal concluded that there was no valid reason to reject the appellant's remission application and set aside the impugned order, thereby allowing the appeal filed by the appellant.

In the operative part pronounced in the open court, the Tribunal officially set aside the impugned order and allowed the appeal filed by the appellant, thereby granting the remission of duty for the lost goods during the specified period.