1992 (12) TMI 128 - AT - Central Excise

Summary

Issues:
- Appeal against order confirming demand of Central Excise duty and imposing penalty for non-filing of application for remission of duty after excisable goods were destroyed in a fire accident.
- Dispute over duty demand as no dutiable goods were destroyed, only in-process material and waste.
- Allegation of suppression of material facts to evade Central Excise duty.
- Argument regarding intimation of fire accident to the Departmental Authorities.
- Validity of notice issued by Superintendent demanding duty for a longer period.
- Interpretation of Rule 49(1) and its proviso in relation to duty demand on destroyed goods.

Analysis:
The appeal was filed by M/s. Kelvin Jute Co. Ltd. challenging an order confirming the demand of Central Excise duty and imposing a penalty due to the non-filing of an application for remission of duty after excisable goods were destroyed in a fire accident. The appellants argued that no dutiable goods were destroyed, only in-process material and waste, which were retrieved and put back into production. They contended that no duty was demandable in this scenario. The Department alleged suppression of material facts to evade duty, emphasizing the non-intimation of the fire accident to the proper Central Excise Officer. The appellants claimed to have sent an intimation via ordinary post, but the Department denied receiving it, leading to a dispute over the intimation process.

Regarding the interpretation of Rule 49(1) and its proviso, the Tribunal analyzed the applicability of duty demand on destroyed goods. The Tribunal noted that the Department's knowledge of the fire accident was limited to the appellants' Annual Report, with no further verification or assessment of the damage conducted by the Departmental Authorities. The Tribunal emphasized the requirement under Rule 49(1) that duty is chargeable only upon the removal of goods from the factory premises or approved storage. The Tribunal found that the Department failed to establish that certain excisable goods were not shown to the satisfaction of the proper officer to have been lost or destroyed in the fire accident. As a result, the Tribunal concluded that the appellants should be given the benefit of the doubt and set aside the order, allowing the appeal.

In conclusion, the Tribunal highlighted the importance of proper intimation to Departmental Authorities in case of incidents like fire accidents to avoid disputes over duty demands. The judgment focused on the necessity for clear communication and documentation to support claims related to duty liability on destroyed goods, emphasizing the principles of Rule 49(1) and the proviso in such situations.