2004 (1) TMI 180 - AT - Central Excise

Summary

Issues:
Claim for remission of duty on damaged goods due to heavy rain.

Analysis:
The appeal was filed against the disallowance of remission of duty on damaged goods by the adjudicating authority. The appellants argued that the damage to the goods, Pan Masala, was caused by heavy rain, making them unfit for human consumption and deserving remission of duty. However, the learned JDR supported the impugned order disallowing the remission. Upon review, the tribunal found that the appellants' claim for remission of duty on damaged goods amounting to Rs. 3,78,400 had been rightly disallowed under Rule 21 of the Central Excise Rules. The rule allows remission only in cases of goods lost or destroyed by natural causes, unavoidable accidents, or if claimed as unfit for human consumption or marketing.

The tribunal noted that the damage alleged by the appellants was due to rainwater entering the factory premises and the bounded store where the goods were stored. Despite this, the tribunal held that the appellants' negligence in failing to take proper care and precautions to avoid the damage was evident. It was highlighted that the appellants should have stored the goods in a safe place and could not claim remission due to their own negligence. Moreover, the appellants failed to provide evidence proving that the goods had become unfit for human consumption. No certificate from a competent authority was presented to support their claim.

Furthermore, it was emphasized that the appellants had already received compensation from an insurance company amounting to over Rs. 27 lakhs for the damaged goods, which exceeded the duty involved. Therefore, the tribunal concluded that there was no illegality in the impugned order disallowing the remission of duty. As a result, the appeal of the appellants was dismissed, upholding the impugned order.