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TMI Blog2007 (2) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... problem in remitting the Customs duty u/s 23 of the Customs Act. As regards the goods indigenously procured, both capital goods and raw materials are involved. The fire accident occurred in the production premises there is ample evidence and that fact is not under dispute. This clearly indicates that the raw materials have already been issued for the intended purpose. Therefore the materials lost in fire accident were in the form of work in progress . The Revenue s contention and the Commissioner s (Appeals) view that even the work in progress material would be covered by the Explanation to Rule 6 is not correct. Further, we would like to point out that according to Rule 21 of the Central Excise Rules, there is a provision for remission of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, work in progress and semi-finished goods both imported and indigenously procured were destroyed. The Revenue proceeded against the appellants demanding both Customs and Excise duty on the goods destroyed. However, the lower authority dropped the proceedings. The Revenue, aggrieved over the decision of the lower authority, appealed to the Commissioner (Appeals) on the ground that the Respondent had not manufactured and exported out of the raw materials destroyed in the fire accident and therefore, in terms of Rule 6 of Central Excise (Removal of Goods at Concessional Rate of duty for Manufacture of Excisable Goods) Rules, 2001 read with Notification No. 22/03 dated 31-3-2003 and therefore, they are liable to pay the Central Excise duty. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mafatlal Industries Ltd. v. CCE & C, Ahmedabad [2003 (154) E.L.T. 543 (Tri.) = 2003 (57) RLT 578 (CEGAT-Mum)] (e) Winsome Yarn Ltd. v. CCE, Chandigarh [2001 (134) E.L.T. 686 (Tribunal) = 2001 (47) RLT 559 (CEGAT-Del.)] 4. The learned JDR, Shri K.S. Reddy reiterated that this case is squarely covered by Rule 6 and therefore the impugned order is legal and proper. 5. We have gone through the records of the case carefully. The appellant's unit is 100% EOU. 100% E.O.U. enjoys duty free import and procurement of capital goods and raw materials on the condition that they would export the finished goods in terms of the letter of permission given by the competent authority. The capital goods procured duty free should be used in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procurement to the manufacturer's premises or during handling or storage in the manufacturer's premises. The Original Authority has given a finding that the raw materials have been issued for production and the same is under various stages of production. He has also stated that the capital goods have been installed and put to use. He has also given finding that the conditions of Notification No. 22/2003 C.E., dated 31-3-2003 have been fulfilled and hence the question of demanding the Central Excise duty forgone under the said Notification would not arise. The Commissioner (Appeals) on the contrary has held that the expression "handling" in the Explanation means usage of goods and extends up to the point when further process on the goods sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the duty on indigenously procured duty free raw materials should be demanded when they are destroyed due to unavoidable accident/natural causes on the specious ground that they have not been used for the intended purpose. We find that the order of the Original authority is well reasoned. Therefore we hold that the raw materials/capital goods which are in the premises of production would not be hit by the Explanation to Rule 6. The above goods have actually been used for the intended purpose. The accident is not the making of the appellant and it should be considered to be an act of God. Hence it is not correct to demand the duty forgo. We allow the appeal with consequential relief.
(Pronounced in the open Court on 28-2-2007) X X X X Extracts X X X X X X X X Extracts X X X X
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