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Issues:
1. Duty liability on imported raw materials not utilized for export due to fire incident. 2. Interpretation of Notification 339/85 regarding duty exemption for lost or destroyed goods. 3. Burden of proof on importer to show absence of negligence for claiming duty exemption. 4. Requirement of insurance for imported goods under the Notification. Analysis: 1. The case involved a dispute regarding the duty liability on imported raw materials that were not utilized for export due to a fire incident at the respondent's premises. The Customs authorities demanded duty on the goods imported but not utilized, leading to a show cause notice for confiscation and duty recovery. The Commissioner adjudicated the matter, dropping the charges based on the absence of evidence of wilful negligence or default by the respondent's Unit or its employees, as required under Notification 339/85-C.E. 2. The Notification stipulated that duty shall not be leviable on goods lost or destroyed not due to wilful acts, negligence, or default of the importer or its agents. The adjudicating authority relied on the police report attributing the fire to an electric short circuit and the settlement of an insurance claim ruling out negligence. The absence of evidence of negligence was further supported by Customs Officers' findings during their site visit. The Department's appeal contended that the importer failed to prove the absence of negligence. However, the Appellate Tribunal held that the importer was not obligated to insure goods for customs duty under the Notification, and failure to do so did not amount to negligence for imposing duty liability. 3. The Department argued that the importer had the burden to prove the absence of negligence to claim the benefit of the Notification. The Tribunal clarified that there was no requirement in the Notification for goods to be insured for customs duty, and the absence of insurance did not establish negligence. Therefore, the Commissioner's finding of no duty liability due to lack of negligence was upheld. 4. Ultimately, the Tribunal found no legal infirmity in the Commissioner's order and upheld the decision, rejecting the Revenue's appeal. The cross-objections were deemed to abate, concluding the matter in favor of the respondent regarding the duty liability on imported raw materials destroyed in the fire incident.
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