2017 (6) TMI 764 - AT - Central Excise

Remission of duty - loss due to fire - It is the claim of the appellant that on 17/12/2011, they had a closing balance of 1026.360 MTs of sponge iron, out of which, they cleared 226.36 MTs of sponge iron on payment of appropriate duties. Hence they should get remission of 800 MTs which was destroyed during the fire incident - Held that - there was a arson and miscreants set fire to the appellant s factory premises. It is also undisputed that the appellant is discharging the Central Excise duty paid on the sponge iron which is manufactured by them and the records maintained by the appellant indicated the closing stock of the sponge iron as on the date of the arson taken place. In my considered view, if the lower authorities are accepting the closing stock on a particular date when the factory is functioning, I do not find any reason to not to accept the closing stock mentioned in the books on the date when the arson took place. Reliance placed in the case of YASH PAPERS LIMITED Versus COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD 2001 (11) TMI 852 - CEGAT, NEW DELHI , where it was held that even if there is a difference in quantity between the remission application and insurance claim, remission application should be granted for the quantities sought for which remission is sought. The rejection of the remission application in respect of 455.75 MTs of sponge iron lost in fire is incorrect - appeal allowed - decided in favor of appellant.

Summary

Issues:
Remission of Central Excise duty on sponge iron lost in fire incident.

Analysis:
1. Facts and Background: The appellant, a manufacturer of sponge iron, faced an attack on their factory premises resulting in the destruction of machinery, office rooms, and sponge iron due to fire. They applied for remission of duty on the quantity of sponge iron lost in the incident.

2. Appellant's Submission: The consultant for the appellant argued that the lower authorities erred in not granting remission on the entire quantity of sponge iron lost. They contended that the Insurance Surveyor's report was not final and disputed the calculation, citing a similar case precedent.

3. Revenue Authority's Argument: The Deputy Commissioner argued that the appellant accepted the Insurance Surveyor's report for claiming compensation on inputs lost due to fire. They highlighted the delay in informing the Department about the incident and lack of evidence supporting the claimed quantity of damaged goods.

4. Judgment: The Member (Judicial) analyzed the submissions and observed that the lower authorities incorrectly rejected the remission claim for 455.75 MTs of sponge iron lost in the fire. The Member emphasized that the closing stock mentioned in the appellant's records should be accepted, and reliance on the Insurance Surveyor's report was erroneous.

5. Precedent and Decision: Referring to a previous case, the Member found the decision of the Tribunal in the case of Yash Papers Ltd. to be applicable. The judgment highlighted the importance of considering the evidence provided by the claimant and granting remission accordingly. The Member set aside the impugned order rejecting the remission application for 455.75 MTs of sponge iron lost in the fire incident.

6. Conclusion: The judgment allowed the appeal, directing the acceptance of the remission application for the entire quantity of sponge iron lost in the fire. The decision emphasized the need for proper verification of evidence and consideration of claimant's submissions in remission cases.

This detailed analysis of the judgment showcases the legal intricacies involved in the remission of Central Excise duty on goods lost in a fire incident, emphasizing the importance of evidence, precedents, and fair consideration of claimant's submissions in such cases.