2000 (10) TMI 118 - AT - Central Excise

Summary

Issues:
1. Whether excise duty is demandable for parts of bailing press procured duty-free and destroyed in fire.

Analysis:
The appeal involved the question of whether excise duty is payable on parts of a bailing press procured duty-free under Notification No. 57/94 and destroyed in a fire. The appellant, an Export Oriented Undertaking, argued that the conditions specified in Notification No. 1/95 cannot be applied to goods received under Notification No. 57/94. They contended that the damaged parts had become waste and scrap, to be disposed of lawfully. The Commissioner, however, confirmed the duty demand and imposed a penalty, alleging improper storage and utilization of the bailing press. The appellant disputed this, claiming the fire was an unavoidable accident. The Fire Officer's report referred to the fire as an accident, and the appellant cited precedents to support their position.

The appellant's consultant argued that Rule 196 of the Central Excise Rules, regarding goods lost or destroyed by accident, was not applicable in this case. They maintained that the fire was an accident and that they had informed the department promptly. The appellant also highlighted that no specific time limit was set in Rule 196 for reporting such incidents. On the other hand, the department contended that the fire was due to human error and negligence, as proper precautions were not taken while storing waste. They emphasized that duty was rightly demanded and mentioned the time limit specified in Rule 147 for reporting lost or destroyed goods.

The Tribunal considered both parties' submissions and the evidence presented. They noted that the cause of the fire was not definitively established. The Surveyor's report suggested various possible causes, including careless smoking or flying embers, but did not conclusively attribute the fire to the appellant. The Tribunal found that negligence could not be attributed to the appellant, as the fire was not caused by them, even accidentally. They disagreed with the Commissioner's findings and held that the accident was not solely due to the appellant's handling or carelessness. Additionally, they agreed with the appellant that the conditions of Notification No. 1/95 could not be applied to goods received under Notification No. 57/94. Therefore, the Tribunal set aside the impugned order and allowed the appeal.