2017 (6) TMI 665 - AT - Central Excise

Remission of duty - in absence of any evidence on record regarding the quantity stored in the godown the figures arrived by the surveyor on finished goods do not appear to be acceptable - Held that - the fire accident was reported to the concerned statutory agencies such as Fire Brigade Police Station and the Central Excise Division Office. It has been alleged in the Show-Cause Notice dated 11.05.2009 that the respondent failed to establish that the accident was unavoidable - there is no dispute that the fire occurred and the goods were destroyed. It is well settled by various decisions that remission of duty cannot be denied on the presumption that fire accident was avoidable - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal filed by Revenue against Order-in-Original granting remission of duty for burnt goods due to fire accident
- Lack of evidence on quantity stored in godown and preventive measures by respondent
- Interpretation of "unavoidable accident" for remission of duty

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Original granting remission of duty for finished Jute products burnt in the respondent's factory due to a fire accident. The Revenue argued the lack of evidence on the quantity stored in the godown and the respondent's alleged failure to take adequate preventive measures to avoid fire accidents, which were observed to occur almost every year in the factory premises.

2. The Tribunal found that the fire accident was reported to statutory agencies and the respondent had taken preventive measures like installing automatic sprinkler systems and fire extinguishers. The Tribunal referred to previous judgments emphasizing that remission of duty cannot be denied based on the presumption that the fire accident was avoidable. The Tribunal cited the case law of Sanskriti Packaging Pvt. Ltd. Vs. CCEx. & S.T., Surat and Union of India Vs. Hindustan Zinc Ltd., which highlighted the need for a liberal and practical approach in interpreting "unavoidable accident" for remission of duty.

3. The Tribunal also cited the case of CCE Vs. M. Kumar Udyog (P) Ltd., where the High Court dismissed the appeal filed by the Revenue on a similar issue. The judgments emphasized that an unavoidable accident is an event beyond the control of the assessee, which occurred despite due care and protection. The expressions "natural causes" and "unavoidable accident" were to be interpreted liberally to serve the legislative intent behind the provision for remission of duty under Rule 21.

4. Based on the discussions and previous judicial decisions, the Tribunal concluded that there was no reason to interfere with the impugned order granting remission of duty for the burnt goods due to the fire accident. Consequently, the appeal filed by the Revenue was dismissed, upholding the decision of the Commissioner of Central Excise to allow remission of duty for the destroyed goods.

This detailed analysis of the judgment highlights the key issues raised, the arguments presented by the parties, and the legal interpretation applied by the Tribunal in reaching its decision to dismiss the appeal filed by the Revenue.