2000 (10) TMI 665 - Commissioner - Central Excise

Summary

Issues:
1. Duty liability on goods cleared for export but not actually exported.
2. Assessment of duty on damaged goods brought back to the factory.
3. Imposition of penalty on the appellant.
4. Consideration of insurance claim in relation to Central Excise Duty.

Analysis:
1. The main issue in this case was the duty liability on goods cleared for export but not actually exported due to an accident. The appellant had cleared granite slabs for export under bond, but the container met with an accident, leading to the goods being brought back to the factory. The jurisdictional Range Superintendent issued a show cause notice for not furnishing proof of export, resulting in a demand for duty and a penalty. The Assistant Commissioner confirmed the demand, stating that duty becomes payable on manufacture, not clearance. However, the appellate authority noted that the goods were never cleared for home consumption, as they became scrap due to the accident. Therefore, the appellants were not liable to pay duty on goods that were not cleared for home consumption.

2. Another issue was the assessment of duty on the damaged goods brought back to the factory. The appellants argued that the damaged granite slabs were no longer marketable and should be re-assessed as scrap under Rule 159 of Central Excise Rules, 1944. The appellate authority agreed, stating that the character of the goods had changed from slabs to scrap due to the accident. It was determined that appropriate duty would be paid when the scrap was cleared from the factory for home consumption.

3. Regarding the imposition of a penalty on the appellant, it was argued that there was no mis-declaration or suppression of facts. The appellants had followed procedures, obtained necessary permissions, and informed the authorities promptly about the accident. The appellate authority found no grounds to impose a penalty, as the appellants had acted in accordance with the law.

4. The consideration of the insurance claim in relation to Central Excise Duty was also discussed. The appellate authority clarified that it was not within their purview to determine if the insurance claim amount included the Central Excise Duty element. It was suggested that the appellants should address this matter with the Insurance Authority appropriately, especially since Central Excise Duty had not been paid.

In conclusion, the appellate authority set aside the Order-in-Original, allowing the appeal with consequential relief. The judgment emphasized that the duty liability did not arise on goods that were not cleared for home consumption due to the accident, and duty would only be paid when the damaged goods were cleared from the factory as scrap.