2003 (12) TMI 150 - AT - Central Excise

Summary

Issues: Duty credit on destroyed goods sent to job worker.

In this case, the appeal was filed challenging the findings of the Commissioner of Central Excise (Appeals) regarding the duty credit on goods destroyed at the job worker's premises before being used in the final product. The Commissioner upheld the Order-in-Original confirming the duty on the lost goods but modified it by not levying a penalty due to the loss being beyond the control of the appellants.

The Tribunal considered the matter and noted that the loss of goods at the job worker's premises due to fire was not disputed. It was established that the loss was a result of an unavoidable accident. The Tribunal referred to Central Excise law, specifically Rule 49(1) proviso, which allows the condonation of waste if it occurs due to genuine reasons and exempts duty payment on goods lost or destroyed by natural causes or unavoidable accidents during handling or storage.

The Tribunal found that the fire at the job worker's premises, even though not within the control of the original manufacturer, was not avoidable or caused by contributory negligence of the appellants or the job workers. Therefore, the Tribunal concluded that no duty payment was required on the goods lost in the fire. Consequently, the Tribunal set aside the orders of the lower authority and allowed the appeal, ruling in favor of the appellants.