2016 (3) TMI 779 - AT - Central Excise

Remission of Central Excise duty - Held that - We find that the Dept. had written to the appellant on 19.12.2005 to furnish certain particulars. The appellant had not replied to the same till 13.1.2006 when they requested the permission to remove goods from the Bonded Store Room for destruction. It is observed that the goods have already been destroyed by the appellant on 11.1.2006 ie., before the said letter. It is also observed that in their letter dtd 30th Dec., they had not given any specific intimation to the Dept. the time and date of the proposed destruction. Removal of goods from Bonded Store Room without permission, and destruction of same in the absence of supervision/permission are clearly not in accordance with the provisions. In the case of M/s Sun Pharmaceuticals vs CCE, Vapi 2014 (2) TMI 1007 - CESTAT AHMEDABAD relied upon by the Appellants, the issue was remission of duty of the goods, which were destroyed in flood. In the case of BIOPAC INDIA CORPN LTD vs CCE, Vapi (2007 (11) TMI 213 - CESTAT AHMEDABAD ) the issue was finished and semi finished goods destroyed in fire. The other relied upon case law by the appellants is the decision of the Hon ble High Court of Madhya Pradesh in the case of Godrej Food Ltd vs Union of India 1994 (4) TMI 84 - HIGH COURT OF MADHYA PRADESH AT INDORE . In the said case, assessee had furnished information sought by the Dept on the next day and thereafter on not receiving any further communication from the Dept. for a long time, destroyed the goods. The facts of these cases are different from the facts of the instant case and therefore they are not applicable herein. As the remission of duty application is rejected, consequent demand of duly is upheld. - Decided against assessee

Summary

Issues Involved:
1. Appeal against rejection of application for remission of Central Excise duty.
2. Compliance with procedures for destruction of goods and remission of duty.
3. Destruction of goods without proper permission and supervision.
4. Legal validity of destruction of goods before obtaining permission.
5. Applicability of relevant case laws in the current scenario.

Issue 1: Appeal against rejection of application for remission of Central Excise duty:
The appellant, a pharmaceutical company, appealed against the rejection of their application for remission of Central Excise duty by the Commissioner of Customs and Central Excise. The appellant claimed that they had followed the prescribed procedures and informed the department about the destruction of goods within the specified time frame. However, the Revenue argued that the appellant failed to provide necessary documents and destroyed the goods without proper permission.

Issue 2: Compliance with procedures for destruction of goods and remission of duty:
The Adjudicating Authority highlighted that the appellant did not adhere to the prescribed procedures for destruction of goods as per Chapter 18 of the CBEC Central Excise Manual. The Authority emphasized the requirement of submitting proof of goods being unfit for consumption or marketing, obtaining permission from the competent authority, and reversing the CENVAT credit involved in the finished goods.

Issue 3: Destruction of goods without proper permission and supervision:
The Revenue contended that the appellant destroyed the goods without obtaining permission from the competent authority and in the absence of a supervising officer. The destruction was carried out before responding to the department's request for inventory details, leading to non-compliance with the necessary procedures.

Issue 4: Legal validity of destruction of goods before obtaining permission:
The Adjudicating Authority noted that the appellant destroyed the goods before obtaining permission and failed to provide supporting documents to justify the destruction. The appellant's actions of destruction without following the laid-down procedure were considered hasty and non-compliant with the statutory requirements.

Issue 5: Applicability of relevant case laws in the current scenario:
The Tribunal distinguished the case laws cited by the appellant, emphasizing that the facts of those cases were different from the present situation. The Tribunal upheld the impugned order of the Adjudicating Authority, stating that there was no reason to interfere with the decision regarding the rejection of the remission application and the consequent demand of duty.

In conclusion, both appeals were rejected, affirming the decisions of the Adjudicating Authority and the Commissioner (Appeals) regarding the rejection of the remission application and the demand of duty on the destroyed goods.