2000 (12) TMI 141 - AT - Central Excise

Summary

Issues:
- Rejection of application for remission of Central Excise duty
- Confirmation of duty demand
- Imposition of penalty under Rule 173Q of Central Excise Rules, 1944

Analysis:
1. The appeal challenged the Order-in-Original rejecting the appellant's application for remission of Central Excise duty, confirming the duty demand of about Rs. 95,000, and imposing a penalty of Rs. 50,000. The appellant, a manufacturer of plastic products, suffered a fire accident destroying the goods. The appellant claimed the goods were lost in the fire and entitled to remission. However, the Commissioner rejected the remission application, alleging clandestine removal of goods without payment of duty.

2. The appellant argued that evidence, including a police report and insurance claim payment, confirmed the fire accident. The appellant contended there was no proof of goods being clandestinely cleared. The Departmental Representative maintained the findings in the adjudication order.

3. The reason for demanding duty was the lack of evidence proving the goods were destroyed in the fire. The show cause notice raised suspicions of clandestine removal based on an insurance company's letter. The impugned order upheld these allegations, emphasizing the appellant's failure to provide conclusive evidence of goods destruction.

4. The impugned order found no tenable evidence supporting the goods' destruction in the fire. Despite photocopies of FIR, insurance claim, and fire brigade reports, the appellant failed to substantiate the loss. The order cited the insurance company's denial of a survey report and delayed reporting of the fire accident as suspicious. However, the order lacked evidence of goods being removed without duty payment.

5. The show cause notice and impugned order lacked evidence to support the clandestine removal allegation. The order criticized the appellant for not producing the survey report and delayed reporting but failed to prove duty evasion. The absence of evidence contradicting the fire accident rendered the findings baseless. Consequently, the impugned order was set aside due to insufficient evidence supporting duty demand and clandestine removal allegations.