2005 (9) TMI 121 - CGOVT - Central Excise

Summary

Issues:
Recovery of Central Excise duty on goods destroyed in fire accident; Interpretation of statements made by company officials; Application for remission of duty pending before the appropriate authority; Demand of duty under specific rules; Precedents cited in support of remission claim; Confirmation of demand by lower authorities.

Analysis:
The case involved the recovery of Central Excise duty on goods destroyed in a fire accident at the factory premises of the company. The Range Superintendent assessed the stock under panchnama following the fire incident. The company voluntarily paid a portion of the duty amount but contested the remaining sum required to be paid under the Central Excise Rules. The Commissioner of Central Excise (Appeals) confirmed the demand for duty on certain goods but set aside the demand on other items. The company filed a Revision Application challenging the order.

The main contentions in the Revision Application included the pending application for remission of duty, misinterpretation of statements made by company officials, and errors in demanding duty under specific rules. The company also cited relevant judgments to support their claim for remission. The government carefully reviewed the submissions, orders, and judgments cited. It noted that there was no evidence of goods being removed from the factory, only that they were destroyed in the fire. The government considered Rule 21 of the Central Excise Rules, which allows for remission of duty on goods lost or destroyed by natural causes.

The government observed that the application for remission was pending, and therefore, the confirmation of duty demand by the lower authorities was premature. Citing previous judgments and the specific rule provisions, the government concluded that the demand for duty on the destroyed goods should be set aside. As a result, the Revision Application was allowed, and both orders passed by the lower authorities were set aside.

In conclusion, the judgment focused on the application for remission of duty, the lack of evidence of goods being removed from the factory, and the provisions of the Central Excise Rules regarding remission in cases of goods lost or destroyed by natural causes. The government's decision to set aside the duty demand was based on these considerations and the pending status of the remission application.