2023 (4) TMI 869 - AT - Central Excise

Protective demand - Remission of duty under Rule 21 of the Central Excise Rules - inputs contained in the finished goods, lost on account of fire - HELD THAT - In the given factual backdrop, confirmation of the protective demand raised, pursuant to the rejection of the remission application, howsoever authorized is a nullity in law, as this Tribunal has remitted back the matter of a decision on the remission application to the Adjudicating Authority. It is imperative that due consideration is given and a speaking order is pronounced in the matter of the remission application afresh by the lower authority. Any decision on the protective demand Show Cause Notice dated 06.11.2012 issued to the appellants can only be an outcome of the decision in the remission application, outcome of which under the present circumstances is yet pending decision. The order is set aside - appeal disposed off.

Summary

Issues involved: Duty demand confirmation, penalty imposition, rejection of remission application, non-compliance with remand order.

The judgment pertains to an appeal filed by M/s. Techmens Chemical Private Limited against an Order-in-Appeal confirming a duty demand of Rs.3,69,969, with penalty imposition set aside. The Department filed Cross Objections against the reduction of duty demand and setting aside of penalty. The appeal concerns a protective demand Show Cause Notice issued for goods destroyed in a fire incident. The appellant had applied for remission of duty under Rule 21 of the Central Excise Rules, which was rejected, leading to a demand for duty, interest, and penalty. The Tribunal remanded the matter to the Adjudicating Authority due to the rejection lacking reasons, emphasizing the need for a decision based on natural justice principles.

The rejection of the remission application without reasons was deemed a violation of natural justice principles, leading to the remand of the matter for a fresh decision. The non-compliance with the remand order rendered the confirmation of the demand and subsequent decisions invalid. The Tribunal directed the Adjudicating Authority to first comply with the remand order before proceeding with any decision on the protective demand Show Cause Notice. Consequently, the Order-in-Appeal confirming the duty demand was set aside, and the original authority was directed to adhere to the Tribunal's remand order. The Cross Objections filed by the Department were also disposed of accordingly.