2007 (12) TMI 121 - AT - Central Excise

Remission in case of robbery - Rule 21 allows remission of duty for goods lost or destroyed by natural causes or by unavoidable accident - Rule doesn t allow remission for goods stolen, pilferred or lost due to robbery/dacoity - remission is allowed in case when goods cannot be taken for domestic consumption but in case of robbery goods are not actually destroyed, they will come in market ultimately remission not allowed as loss is neither by natural causes nor by unavoidable accident

Summary

Issues:
Claim for remission of duty due to armed robbery in factory before payment of duty and clearance.

Analysis:
The appellants sought remission of duty following an armed robbery in their factory before duty payment and clearance. The Adjudicating Commissioner based their decision on a ruling by the Madras High Court in a similar case, stating that theft cannot be considered an unavoidable accident for remission under the Excise Rules. The appellants' representative argued that the cited case was distinct as it involved theft by the company's manager and assistants, unlike the present case. Supporting decisions cited were Sialkot Industrial Corporation, Meerut v. UOI and G.K. Winding Wires Ltd. v. CCE, Noida.

The Department's representative contended that Rule 21 of the Central Excise Rules, 2002 only allows remission for goods lost by natural causes, unavoidable accidents, or deemed unfit for consumption or marketing. Theft, pilferage, or robbery are not covered under this rule. It was highlighted that the police report suggested ill motives on the part of the appellants.

After reviewing the arguments and case records, the Member (T) found that the Adjudicating Commissioner's decision was based on the Madras High Court ruling and a Tribunal decision in a similar case. The reference to G.K. Winding Wires Ltd. was noted as a stay order with a preliminary view. The Member clarified that the Delhi High Court decision cited in the stay order was not directly applicable to the present case. Rule 21 allows remission for goods lost by natural causes or unavoidable accidents, excluding stolen or pilfered goods. The Member emphasized that stolen goods eventually enter the market, unlike goods lost by natural causes, justifying the distinction in duty remission. Despite the absence of the police report, the interpretation of law and previous judgments indicated that the present case did not qualify for duty remission under Rule 21. Consequently, the appeal was rejected, upholding the impugned order.