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TMI Blog1986 (7) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... next day namely on 15-10-1981. They notified fully manufactured and ready to deliver condition of Polyurethane foam and articles thereof contained in 452 bundles weighing 9767 kgs. valued at Rs. 1,02,960 stored in the cooling unit and farming room of the factory which had not been accounted for by him in the statutory record. The officers seized the aforesaid 452 bundles under a panchanama dated 15-10-1981. But they handed over the goods to the manufacturer for safe custody under the supratnama dated 15-10-1981. 2. The further enquiry made by the officers disclosed that some excisable goods manufactured by them had been illicitly removed to Shed No. A/2/33 in the industrial area in Daman. They visited the said premises and found out of 303 bundles 5 bundles did not contain any identification marks, such as marks and numbers, description of goods, weight etc. There was also no information regarding payment of duty. They, therefore, seized the said 50 bundles totally weighing 2320 kgs. This quantity was also handed over to the manufacturer under a supratnama dated 15-10-1981 for safe custody. They recorded the statement of Manager, Shri Champaklal Parekh and also the statement of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the above order of the Collector, as stated earlier, the appellants have come up in this appeal. Shri Wellington S. Christian appearing for the appellants contended that the Collectors order in regard to 452 bundles contained Polyurethane Foam is illegal and unsustainable in law. Neither the value nor the duty can be demanded in respect of goods which were destroyed by accidental fire. In support of his contention, Shri Wellington Christian relied on a decision reported in 1983 (12) E.L.T. 233 (Kar.) in the case of Shri Jagnathan Dattatraya Shah v. Collector of Customs Central Excise, Bangalore and Another. 5. Before going into the other contentions of Shri W. Christian we may dispose of the above contentions of Shri Christian. Shri N.K. Pattekar appearing for the Collector did not dispute that 452 bundles were got destroyed by accidental fire. He, however, contended that the goods were given to the custody of the appellants and they were fully manufactured goods and therefore they became liable to duty. Further since the appellant had not entered the said stock in the R.G. 1 Register and since they are not removed to Bonded Store Room there was clear contravention of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s beyond his control then the penal provisions of that contract cannot be enforced against him. The Karnataka High Court also held that since the lorry was destroyed in a rioting, the Department cannot confiscate the vehicle. The ratio of the above decision equally applies to the facts of the present appeal. The Collector therefore cannot recover the value of the goods destroyed by fire. No duty also can be demanded in respect of the said goods having regard to the scheme of the Central Excises and Salt Act and the Rules made thereunder. The proviso to Rule 49 specifically provided for remission of duty on goods which were destroyed due to natural causes. We, therefore, set aside that part of the order of the Collector by which he directed payment of Rs. 1,02,960 stated to be the value of the 452 bundles containing Polyurethane Foam and also the demand of duty at the appropriate rate on the said quantity. 7. It was next contended by Shri Christian that the Collector was unjustified in ordering confiscation of 58 bundles more on the ground that they did not contain identification marks. He urged that 330 bundles of Polyurethane Foam were sold to Agfa firm and since the said firm d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 bundles 58 would not contain any marking. One can understand the mistake if it is to occur in respect of one or two or even five bundles. We are not impressed by the contentions of the appellants that it was due to mistake markings were not made on 58 bundles. It is significant to note that Agfa had not made any payment for the quantity said to have been purchased and stored in Daman. We therefore reject the appellant s contention with regard to the 58 bundles. We may observe that the decision relied on by the learned Advocate has no application to the facts of the present case. In the decision cited by the learned Advocate, the description of the paper was mentioned on the packing but it was wrongly mentioned as writing paper. Further, the High Court found that the Department was fully aware that what was removed was packing or writing paper and in the said circumstances, the High Court held that it cannot be said that the goods were removed clandestinely without knowledge of the Central Excise Officer. 9. The only other aspect that remains for consideration is about the demand of duty in respect of clandestine removal of 1260 kgs. of P.U. and another 10,711 kgs. P.U. Foam whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the case in para 16 of his order. He found that the goods removed under Gate-Pass No. 151 dated 15-4-1981, 160 dated 22-4-1981 were actually despatched from Daman to Bombay instead of to Delhi. The Collector s further finding was similarly in other cases, the goods were despatched from Daman to Bombay instead of to Delhi as per Gate-Passes Nos. 176 dated 27-4-1981, 183 dated 30-4-1981 and 327 dated 6-9-1981. He also observed that the quantity in gate-passes differ from those shown in the railway receipt. We may pause here to point out that the appellant made an apparent attempt to co-relate the various railway receipts with the gate-passes but then the Collector found that no such co-relation was possible. During the hearing of this appeal, it was not shown to us that the gate-passes would cover the goods transported under the different railway receipt. In other words, the appellants were not able to convince us that the finding of the Collector that there is no co-relation between the railway receipts and the gate-passes were erroneous. We therefore seen no reason to disturb that part of the finding of the Collector. 12. Finally, we come to the question of penalty. 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