2009 (10) TMI 408 - AT - Central Excise

Lost of goods in transit- A consignment of 193 cartons containing 8754.48kgs of 100% combed yarn for export to Bangladesh moved to Kosi Kalan was lost in transit due to burglary and such matter is before a Magistrate Court. The appellant was not given possession of goods by police for which the appellant has suffered a serious loss. While this was the position, the appellant has also lost its remission remedy in relation to duty before the learned Commissioner, Lucknow. Before the learned Commissioner has decided the issue relating to remission, a show cause notice was issued by the learned Deputy Commissioner, Aligarh demanding duty under Section 3 of Central Excise Act, 1944. Held that- . We do not appreciate that the goods lost shall be treated as sale under the law when there was no sale in DTA. When the appellant prefers to pay the duty availing concession in view of sale in the course of export, there will be no bar to consider the claim of the appellant in terms of Notification claimed by the appellant. Sale being in the course of export, sale of the same as DTA sale, is not permissible under law. But on the peculiar circumstances of the case, the sale having been made already and the appellant prefers to discharge the duty liability, it should not face further hardship of normal levy of excise duty under Section 3 of Central Excise Act, 1944. Had there been export no excise duty could have been collected. Therefore, we remand back the matter for examine.

Issues:
1. Loss of consignment in transit and subsequent demand of duty.
2. Consideration of goods meant for export as fit for sale in Domestic Tariff Area (DTA).
3. Applicability of Notification No. 8/97-C.E. dated 1-3-1997 for duty concession.
4. Dispute regarding duty liability and interest payment.

Analysis:
1. The appellant's consignment of combed yarn for export was lost in transit due to burglary, resulting in a demand for duty under Section 3 of the Central Excise Act, 1944. The appellant suffered significant losses as the goods were not handed over by the police and the remission remedy was lost before the Commissioner, Lucknow.

2. The appellant argued that since the goods meant for export were lost and could not be exported, they should be treated as fit for sale in the Domestic Tariff Area (DTA). Referring to a previous decision, the appellant contended that the goods, though intended for export, could be considered as meant for sale in the DTA. The appellant agreed to pay duty if the goods were treated as DTA sale within the limits set by the Development Commissioner.

3. The issue of applicability of Notification No. 8/97-C.E. dated 1-3-1997 for duty concession was raised. The appellant sought the benefit of this notification subject to fulfilling its conditions, especially if the quantity of goods for DTA sale fell within the ceiling prescribed by the Development Commissioner.

4. The Tribunal noted that while export does not attract excise duty, the appellant was willing to pay duty under the concession provided by the notification. The Tribunal directed the adjudicating authority to determine the quantum of goods for DTA clearance within the prescribed ceiling, assess the fulfillment of conditions under the notification, and if duty liability arises, ensure payment of interest in accordance with the law.

In conclusion, the Tribunal set aside the impugned order, remanding the matter back to the adjudicating authority for a fair hearing and a reasoned decision in accordance with the law, considering the specific circumstances of the case and the appellant's willingness to discharge duty liability under the applicable notification.

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