2017 (2) TMI 101 - AT - Central Excise

Remission of duty u/r 21 of CER - damage of godos due to flood and rains - No remission can be given without ascertaining the actual quantum of damage - reliance was placed in the case of Sun Pharmaceutical Industries Ltd. 2015 (9) TMI 410 - BOMBAY HIGH COURT by appellant to claim remission where the remission was allowed. Held that - the appellant had suffered damage on 26/07/2007 and made up their mind for seeking remission on 03/08/2005. Thereafter they submitted their application for remission on 15/12/2005 almost 41/2 months after they making up their mind. Revenue was in correspondence with the appellant thereafter seeking the survey report and actual details of the goods however the appellant failed to submit the same. The appellant claimed that the goods have been cleared along with scraps. I find that remission cannot be granted without actual ascertainment of the damage and verification to the satisfaction of the Revenue. In the case of Sun Pharmaceutical Industries Ltd. the appellant was reminding the Revenue to take action on remission application. In the instant case it is apparent that the Revenue was alert and action was taken immediately after submission of remission application. In these circumstances destruction and disposal of goods without verification/inspection cannot be condoned and the facts of the case not applicable to the present case. Appeal dismissed - decided against appellant.

Summary

Issues:
- Remission of duty under Rule 21 of Central Excise Rules, 2002 for goods lost or destroyed by natural causes.
- Delay in submitting details for remission claim.
- Requirement of ascertainment of actual quantum of damage for remission.

Analysis:
1. The case involved a factory hit by flood and rain resulting in damages to raw materials and finished goods. The appellant sought remission of duty under Rule 21 of Central Excise Rules, 2002. However, the Commissioner rejected the claim stating it should have been made before goods removal and not after. The main dispute was regarding the ascertainment of the actual quantum of damage due to lack of proper documentation and inspection.

2. The appellant's counsel argued that the prescribed procedure for remission in case of goods lost by natural causes was followed, and any delay in submission of details was not their fault. They relied on a High Court decision to support their case.

3. The Assistant Commissioner argued that remission cannot be granted without ascertaining the actual damage. He highlighted the delay in providing details and the disposal of goods without inspection.

4. The Tribunal found that while the damage was acknowledged, the key issue was the lack of actual ascertainment of the damage and verification to the satisfaction of the Revenue. The appellant took months to submit details and failed to provide the necessary documentation despite correspondence with the Revenue.

5. The Tribunal distinguished a previous case where remission was allowed despite goods being destroyed before examination, as in that case, the Revenue was reminded to take action. In the present case, the Revenue was prompt in their actions after the remission application, and disposal of goods without verification was not acceptable.

6. Ultimately, the appeal was dismissed by the Tribunal due to the failure to provide adequate documentation and verification for the remission claim, emphasizing the importance of proper ascertainment of damage for granting remission of duty.