1966 (5) TMI 11 - HC - Central Excise

Summary

Issues:
1. Remission of excise duty on goods lost in a warehouse due to fire.
2. Jurisdiction of the Assistant Collector in remission matters.
3. Burden of proof for remission under rule 147.
4. Application of rule 147 in cases of loss or destruction by arson.
5. Liability to pay duty in the absence of remission order.
6. Objection of laches in filing the petition.

Analysis:
1. The petitioner sought remission of excise duty on tobacco destroyed in a fire at its warehouse under rule 147. The court held that duty became payable when goods were stored in the warehouse, and remission could only be considered if the loss was due to an unavoidable accident. The burden of proving this lay with the petitioner, who failed to establish the fire as an unavoidable accident, especially since it was reported as arson. The Collector's decision not to remit the duty was upheld, as the petitioner did not demonstrate taking reasonable care to prevent the accident.

2. The petitioner contested the Assistant Collector's jurisdiction in the remission proceedings, arguing it vested solely with the Collector. However, the Collector's order and subsequent dismissal of appeal by the Central Board of Revenue affirmed the Assistant Collector's competence in the matter. The Assistant Collector's decision to confirm the duty demand was deemed valid.

3. Rule 147 required the goods to be lost or destroyed by an unavoidable accident for remission of duty. The court emphasized that the burden of proof rested on the petitioner to establish the loss was indeed unavoidable. The petitioner's vague requests for remission without substantiating the accident as unavoidable did not meet the criteria set out in the rule.

4. The court addressed the application of rule 147 in cases of loss or destruction by arson. It noted that the Manual of Departmental Instructions clarified such cases could be considered for remission if it was proven that the loss was unavoidable despite reasonable care. As the petitioner failed to provide evidence of exercising reasonable care, the Collector's decision not to remit the duty was upheld.

5. In the absence of an order granting remission, the petitioner remained liable to pay the duty demanded. The court affirmed that the enforcement of the duty against the petitioner was justified since remission was not granted.

6. The respondents raised the objection of laches, alleging delay in filing the petition. However, the court did not delve into this issue as the petition failed on its merits. Ultimately, the court dismissed the petition with costs, upholding the decision regarding the duty demand and remission application.