2017 (8) TMI 1161 - AT - Central Excise

100% EOU - remission of duty - whether remission of duty is allowable when goods cleared from the factory without payment of duty for export under bond are destroyed due to unavoidable accident before the said goods could be exported? - Held that - The appellant being an EOU is entitled for the benefit of Notification No.24/2003 dated 31.03.2003, and that the goods have not been cleared in DTA. In the present case, the goods cleared for export got damaged in an accident and it cannot be said that the goods have been cleared in DTA - In an identical case, the Tribunal in the case of Madhav Marbles and Granites Ltd. 2008 (10) TMI 209 - CESTAT, CHENNAI , has held that the demand of duty is not sustainable since the EOU is eligible for the benefit of N/N. 24/2003 dated 31.03.2003 - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether an EOU is liable to pay excise duty on goods damaged in an accident before export?
- Applicability of Notification No.24/2003 dated 31.03.2003 to EOUs.
- Interpretation of remission of duty in case of unavoidable accidents.
- Comparison with relevant case law on duty remission for EOUs.

Analysis:
1. The appellant, a 100% EOU, exported granite slabs which got damaged in an accident before reaching the port. The authorities demanded excise duty on the damaged goods, alleging they were ultimately exported. The appellant argued that being an EOU, they are exempt from duty under Notification No.24/2003 as the goods were cleared for export and not in the Domestic Tariff Area (DTA).

2. The appellant cited the Honest Bio-Vet Pvt. Ltd. case, emphasizing the remission of duty for goods destroyed before export due to unavoidable accidents. They contended that even though they didn't apply for remission, being an EOU makes them eligible for duty exemption. Additionally, they relied on the Madhav Marbles case to support their position.

3. The Ld. AR supported the duty demand upheld by the lower authorities. However, the Tribunal noted that the goods were cleared under bond for export and damaged in an accident, making them eligible for the Notification No.24/2003 benefit. Referring to precedent cases, the Tribunal emphasized that duty remission is permissible in such cases for EOUs.

4. After considering both arguments, the Tribunal found that the demand for duty was unsustainable. They ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with any consequential relief as per law. The decision was pronounced in open court on 15.06.17.

This judgment clarifies the duty liability of EOUs in cases of goods damaged before export due to unavoidable accidents, reaffirming the applicability of relevant notifications and legal precedents supporting duty remission for such circumstances.