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Issues involved: Whether remission of duty is available u/s 23 of the Customs Act for imported goods damaged in fire while kept in a bonded warehouse.
Summary: In the appeal filed by M/s. Winsome Yarn Ltd., the issue at hand was whether remission of duty is available under Section 23 of the Customs Act for imported goods damaged in a fire while stored in a bonded warehouse. The Appellants, a 100% E.O.U. engaged in yarn manufacturing, imported Viscose Staple Fibre which got damaged in a fire while warehoused. The Dy. Commissioner confirmed the duty demand, stating that since the raw material was destroyed in fire without manufacturing finished goods for export, the conditions of Notification No. 13/81-Cus. were not met. The Appellants argued that the goods were destroyed before clearance for home consumption, citing Section 23 of the Customs Act which allows duty remission for goods lost or destroyed before such clearance. They contended that warehousing is distinct from clearance for home consumption as per Section 46 and 68 of the Act. Upon considering the arguments, the Tribunal agreed with the Appellants that the goods were damaged in the bonded warehouse before clearance for home consumption. Referring to Section 23 of the Customs Act, which allows duty remission for goods lost or destroyed before such clearance, the Tribunal held that the duty cannot be demanded from the Appellants in this case. Therefore, the impugned Order was set aside, and the appeal was allowed.
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