2008 (12) TMI 167 - AT - Central Excise

Goods destroyed in Fire Remission of Duty - After careful consideration of the facts of the case and the submissions by both sides, it is found that Commissioner rendered a finding that the fire accidents in the instant case could have been avoided had the assessee been careful is not reasonable or supported by facts of the accidents. Nobody invites loss of property due to accident by choosing to be careless. Accidents, especially, fire accidents occur despite all caution and care taken by people. - As the relevant rule empowers the Commissioner to grant the remission of duty due on excisable goods destroyed in unavoidable accidents, the appellants eminently deserve relief provided in the rule in view of the facts of the case. The appeal allowed.

Summary

Issues:
- Request for remission of duty due on destroyed matches
- Commissioner's rejection based on carelessness of the assessee
- Interpretation of Rule 21 of Central Excise Rules, 2002
- Applicability of case laws supporting remission in fire accidents

Analysis:
1. The Commissioner rejected the assessee's request for remission of duty on matches destroyed in fire accidents, attributing the accidents to the carelessness of the assessee. The first accident was linked to improper electrical connection, and the second to excessive heating due to faulty wiring. The Commissioner found the assessee at fault for not rectifying the wiring after the first accident, leading to the second accident. This decision was based on Rule 21 of Central Excise Rules, 2002, which allows remission only for goods damaged due to natural causes or unavoidable accidents.

2. The appellants challenged the Commissioner's decision, citing various case laws supporting remission in cases of excisable goods lost in fire accidents despite precautions. During the hearing, they referenced cases like Chandpur Enterprises Ltd. v CCE, Kisan Sahkari Chini Mills Ltd. v CCE, and U.P. State Sugar Corporation Ltd. v. CCE, which emphasized that accidents can occur despite care and should not lead to denial of remission. The appellants argued that the accidents were not due to their carelessness but were unavoidable.

3. Upon reviewing the facts and submissions, the Member (T) found the Commissioner's reasoning flawed. The Member disagreed with the attribution of accidents to the assessee's carelessness, noting that accidents, especially fire accidents, can happen despite all precautions. The causes of the accidents were varied, including rodents disturbing matches and faulty electrical connections. As the rule allows remission for goods destroyed in unavoidable accidents, the Member concluded that the appellants were entitled to relief. The appeal was allowed based on the cited case laws and the facts of the case.

This judgment emphasizes the importance of distinguishing between unavoidable accidents and carelessness when considering remission of duty on destroyed goods, highlighting the need for a thorough assessment of the circumstances surrounding such incidents.