2003 (9) TMI 188 - AT - Central Excise

Summary

Issues:
Confirmation of demand of Central Excise duty for stolen goods and penalty imposition.

Analysis:
The appeal was filed against the confirmation of demand of Central Excise duty for stolen goods and the penalty imposed. The Appellant, a manufacturer of Brass sheet/Circle/foils, experienced a theft in their factory, leading to a demand of duty and penalty. The Additional Commissioner confirmed the duty demand and penalty, citing theft as not an unavoidable accident for remission under Rule 49. The Commissioner (Appeals) upheld this decision, prompting the appeal. The Appellant argued that theft should be considered an unavoidable accident, referencing relevant case laws and a Tribunal decision. The Appellate Tribunal noted the Madras High Court judgment in a similar case involving stolen tea, emphasizing that theft cannot be termed an accident and that owners are responsible for safeguarding goods from theft. Consequently, the Tribunal upheld the duty demand but set aside the penalty since the goods were stolen, not intentionally removed without duty payment. The appeal was disposed of accordingly.

In summary, the key issue revolved around whether theft qualifies as an unavoidable accident for remission of Central Excise duty. The Appellant contended that theft should be considered an unavoidable accident, while the Department argued otherwise, citing the Madras High Court judgment. The Tribunal, aligning with the Madras High Court's interpretation, upheld the duty demand but annulled the penalty, considering the circumstances of the theft. This case underscores the importance of safeguarding goods and the owner's responsibility in preventing theft to avoid duty liabilities.