2024 (11) TMI 741 - AT - Customs

Remission of duties of excise on indigenous goods and custom duty on imported goods - goods lost and destroyed in fire - HELD THAT - We find that there is no dispute of the fact that the fire incident has occurred in the factory of the appellant and it is also not in dispute that the goods imported as well as the indigenously procurement raw materials were destroyed in fire. The appellant were also sanctioned the insurance claim by the insurance company. From the record it is not coming out that there is any mischief on the part of the appellant in the incident of fire in the factory. Moreover, there is also no evidence that the fire accident is occurred due to carelessness of the appellant. Commissioner has raised various deficiency for deciding the remission application however, it appears that the appellant had no occasion to explain the above queries of the learned Commissioner before the adjudication, therefore in our considered view this matter should go back to Commissioner for reconsideration of the appellant s remission application the appellant should be given proper opportunity to explain their case and the queries raised by the learned Commissioner in the impugned order. As regard other appeals, since, in those appeals the demand of duties were confirmed consequential to the rejection of remission application, we are of the view that all the three matters should be decided by the learned Commissioner who is competent to decide the remission application. We set aside the impugned orders and allow the appeals by way of remand to the adjudicating authority for passing fresh orders.

Summary

Issues:
1. Rejection of remission application for excise duty and custom duty.
2. Demand of custom duty on duty-free imports and excise duty on domestically procured goods due to fire accident.
3. Appeal against rejection of remission application and consequential demands.

Analysis:

Issue 1: Rejection of Remission Application
The appellant, engaged in manufacturing bulk drugs and fine chemicals, faced a fire accident resulting in the destruction of goods. The appellant applied for remission of excise duty and custom duty on indigenous and imported goods lost in the fire. The Commissioner rejected the remission application citing deficiencies, including failure to provide certain documents and fulfill conditions of B-17 Bonds. The appellant argued that the fire was not due to negligence and pointed to precedents where remission was allowed in similar cases. The Tribunal found that the Commissioner raised various deficiencies without giving the appellant a chance to explain before adjudication. Therefore, the matter was remanded to the Commissioner for reconsideration, allowing the appellant an opportunity to address the queries raised.

Issue 2: Demand of Custom Duty and Excise Duty
Consequent to the rejection of the remission application, demands for custom duty on duty-free imports and excise duty on domestically procured goods were raised. The Tribunal noted that these demands were confirmed based on the rejection of the remission application. However, since the remission application was being reconsidered, the Tribunal decided that these matters should also be decided by the Commissioner. The appellant's argument that a strong case for remission of duty existed influenced the Tribunal's decision to remand the case for fresh orders.

Issue 3: Consequential Appeals
Appeals were filed against the rejection of the remission application and the demands of custom duty and excise duty. The Tribunal found that these appeals were linked to the remission application's rejection. Therefore, all three matters, including the remission application and the consequential demands, were remanded to the adjudicating authority for fresh orders. The Tribunal emphasized the need for the appellant to have a proper opportunity to explain their case and address the deficiencies pointed out by the Commissioner.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeals by remanding the case to the adjudicating authority for reconsideration and fresh orders, ensuring the appellant's right to address the deficiencies raised in the remission application and consequential demands.