2017 (8) TMI 350 - AT - Central Excise

Remission of duty - destruction by fire - the excisable goods which were pending clearance were destroyed or lost by unavoidable accident - Held that - issue is no more res-integra as decided in the case of M/s Honest Bio-Vet Pvt. Ltd. Versus CCE Ahmedabad-I 2014 (11) TMI 579 - CESTAT AHMEDABAD , where it was held that if the goods cleared for export under Bond are destroyed before the export, ownership of the said goods and also duty liability, if any, would be always to the account of appellant assessee and that the said goods could be considered having been destroyed before removal and the benefit of Remission of duty is allowable in such an exceptional situation in terms of Rule 21 of Central Excise Rules 2002 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Remission of duty on goods destroyed in a fire accident before removal from the factory.

Analysis:
The appeal was filed against an order passed by the Commissioner (A) upholding the Order-in-Original. The appellant, a company engaged in manufacturing rubber products, sought remission of duty on goods destroyed in a fire accident. The appellant dispatched goods for export, out of which some were lost in a fire. The lower authorities demanded duty and interest, which the appellant deposited under protest. The Commissioner (A) held that there is no provision for remission of duty, leading to the appeal.

The appellant argued that the impugned order did not consider the factual and legal position and ignored binding judicial precedent. Citing a Larger Bench decision, the appellant contended that duty remission is permissible under Rule 21 of the Central Excise Rules, 2002, for goods destroyed before removal. The appellant highlighted the definition of "Place of Removal" under the Central Excise Act, emphasizing that duty liability extends until the goods are exported. Referring to the Central Sales Tax Act, the appellant stressed that the sale for export is completed at the port of shipment, making the port the place of removal. The appellant asserted that the destroyed goods were eligible for duty remission under Rule 21.

The Tribunal, following the Larger Bench decision, held that the impugned order was not sustainable in law. By setting aside the order, the Tribunal allowed the appeal of the appellant. The judgment emphasized the fair interpretation of Rule 21 and the eligibility of the appellant for duty remission on goods destroyed before export. The decision aligned with the precedent set by the Larger Bench and the High Court of Gujarat, confirming the appellant's entitlement to remission of duty in such circumstances.