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TMI Blog1987 (5) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... s under 45 AR 4(s) forms after executing a general bond for export without payment of central excise duty. The stipulated period for export was six months from the date of clearance of the fabrics from the various manufacturing mills. However, these fabrics caught fire while stored in the godown of C.H.A. M/s. Tulsidas Khimji Pvt. Ltd. on 24/25-5-1975. These bales could not therefore be exported. The fact of the bales perishing in fire was reported by M/s. Siraj Sons to the Asst. Collector of Central Excise in their letter, dated 26-5-1975. But the Asstt. Collector raised 19 demands for central excise duty aggregating to Rs. 2,09,880.28 under Rule 14-A of the Central Excise Rules, 1944 except for duty amounting to Rs. 176.62 on one bale, which was not perished in fire. The Collector confirmed the demand under his order, dated 24-3-75. 2. On behalf of the appellants, advocate Shri Korde first set out briefly the facts of the case including the report by the appellants to the Asstt. Collector. He submitted that the Central Excise Authorities contacted the Insurance company to find out whether the appellants claim with the insurance company covered the duty amount or not. There was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablished that the goods were destroyed in fire. He argued that proviso(c) was to be read with Rule 13(1) which permitted exports of goods in bond without payment of duty. If the goods are accounted to the satisfaction of the Collector, the duty was not leviable on the goods. The second question was whether duty was payable because of the bond executed by the appellants. The advocate answered this question by observing that the bond was for payment of duty in case of failure to export the goods. But in case the goods were destroyed, they could not be exported and this was established to the satisfaction of the Collector. In such circumstances, the duty was not demandable from the appellants. In support of his contention Shri Korde relied on the Tribunal s decision in the case of Indian Oil Corporation 1985 (21) E.L.T. 881. He contended that Rules 13,14 and 14A permitted export of goods without payment of duty and the bond could not override the provisions of these Rules. Shri Korde reiterated his submission that in case the appellants succeed in their appeal they would have no objection to the Tribunal s order being communicated to the Insurance Co. 3. On behalf of the Collector, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities to grant remission in case of goods cleared for export without payment of duty. He, therefore submitted that the appeal should be dismissed. 4. In reply advocate Shri Korde argued that this was not a case of remission of duty. This was a case where duty was not demandable under Rule-14. Rule 13 laid down the procedure for export of goods in bond and Rule 14A provided for penalty for failure to furnish proof of export or for not accounting for the goods. So far as Rules 9 and 49 were concerned these were not relevant as argued by the SDR. He mentioned the Tribunal s decision in the case of Indian Oil Corporation only to highlight that the bond cannot override the Rules. He, therefore, reiterated his request for allowing the appeal. 5. We have examined the submissions made on both the sides. So far as the facts are concerned, they are not in doubt or dispute. Therefore, the question involved in this appeal is the interpretation of proviso (c) to Rule 14-A of the Central Excise Rules, 1944. Before we proceed to examine the case it is necessary to dispose of the aspect about the Insurance Co. reimbursing the appellants of the duty amount. The levy of central excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty if the goods are destroyed while still in the bonded store room. After the goods are cleared from the factory they cease to be under the control of Central Excise Department and it would be impossible for the C.E. Department to verify whether the goods have been perished in fire or not as in the present case. Thus, the control over the factory cannot be extended to the control on the goods which have been permitted clearance without payment of duty for the purpose of export. Therefore, in such a case, where the exporter is not able to export the goods he cannot claim waiver of the C.E. duty. This is a risk which he takes when he removes the goods and gives the bond. This risk had been covered by the appellants as prudent persons and they have taken out the Insurance policy and received the payment for the full amount including the C.E. duty element. Therefore, in terms of Rule 14A, the demand for duty is correct and proviso(c) cannot be interpretted to mean that the duty can be waived. Provisos (a) and (b) cover only those cases where duty have been paid on the goods consequent to diversion of goods for home consumption from exports Proviso (c) has also to be interpreted sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reject the appeal. [per : K. Gopal Hegde, Member (J)]. - The short point for our consideration is whether no duty is demandable in respect of goods which were removed for export in bond under Rule 14 of the Central Excise Rules 1944 (for short the Rules, but were got destroyed by fire before export). 8A. For the appellants Shri Korde contended that the destruction of the goods by fire was accepted by the collector and since the collector was satisfied as to the accountal of the goods removed for export, no duty can be demanded in respect of the said goods and in that connection Shri Korde relied on Clause (c) of Rule 14-A of the Rules. The further contention of Shri Korde was that the execution of the bond would not entitle the department to claim duty if the appellant had satisfactorily accounted for the goods removed in bond. 9. In order to appreciate the contentions of Shri Korde, it is necessary to understand the scheme of the Central Excise Act and Rules. Section 3 of the Act provides for levy and collection of duties on excise on excisable goods which are produced or manufactured in India at the rate set forth in the First Schedule. The manner of collection of duty is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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