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TMI Blog2010 (9) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... [Order]. - Heard the learned Advocate for the appellants and DR for the respondent. 2. This appeal arises from order dated 24-10-2008 passed by the Commissioner (Appeals) Gurgaon. By the impugned order, the appeal filed by the appellants against the order of the original authority has been dismissed. The Assistant Commissioner, Gurgaon by his order dated 29-2-2008 had confirmed the demand for recovery of sum of Rs. 1,28,798/- against the appellants alongwith interest thereon and equal amount of penalty. The appellants are engaged in manufacture of excisable goods classifiable under Chapter 87 of the Central Excise Tariff Act, 1985. They are registered with the Central Excise Department and avail cenvat credit facility. In the course of the audit of the records of the appellants, it was observed by the department that the appellants had received an amount of Rs. 7,89,210/- as insurance amount on the quantity of excisable goods cleared for export and lost in transit, a show cause notice dated 23-8-2007 came to be issued for necessary action for recovery of the said amount of Rs. 1,28,798/-. The proceedings initiated pursuant to the issuance of the said show cause notice were c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disobedient or mala fide intention to evade duty on the part of the appellants and hence there was no justification for imposition of penalty. 6. On the other hand, DR placing reliance in the decision of the Larger Bench of the Tribunal in the matter of Gupta Metal Sheets v. CCE, Gurgaon reported in 2008 (232) E.L.T. 796 (Tri.-LB) and of the Single Member of the Tribunal in S.V.G. Exports (P) Ltd. v. CCE, Chennai-III reported in 2008 (232) E.L.T. 305 (Tri.-Chennai), submitted that the law clearly required the appellants to pay the duty unless the factum of export is clearly established. In the case in hand, concurrent findings are to the effect that there was no such voluntary disclosure by the appellants about the export of the goods. He further submitted that theft of goods does not amount to loss of goods within the meaning of the said expression under the statutory provisions comprised under the excise statute. 7. The facts that the goods were sought to be cleared for export under bond and in that regard there was compliance of Rule 19 of the Central Excise Rules, 2002 are not in dispute. The first point of dispute relates to the absence of proof of actual export of the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be initiated against the exporter . 10. Plain reading of the above provision would disclose that mere preparation of the documents at or around the time of clearance of the goods for export by itself will not establish the factum of export of the goods and in spite of preparation of lost documents, if party actually fails to export the product within six months from the date of the clearance of the goods, it is obligatory for the party to deposit the excise duty alongwith interest on his own, failing which necessary proceedings for recovery thereof can lay. This apparently discloses that the documents which are referred to in Rule 19 by themselves do not establish the factum of export. They are merely to enable the party to export the goods lawfully. The documents which are necessary for lawful export would not apparently establish the factum of export. Being so, the documents in the nature of ARE-I, bill of lading and shipping bill prepared prior to the actual export of the goods cannot be sufficient to establish the factum of export. 11. Undisputedly, the appellants are unaware of the place where the goods were allegedly stolen, and the loss is stated to be on account of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a clear case for invocation of extended period of limitation. 14. The Larger Bench of the Tribunal in Gupta Metal Sheets had cleared ruled thus :- 8. From a bare reading it would appear that remission can be claimed with respect to excisable goods which are lost or destroyed by natural causes or in some unavoidable accident. The term loss cannot be understood in the limited sense of loss to the manufacturer. In the context of the Central Excise Law, it has to be understood as being unavailable for consumption in the market. We find substance in the submission of the Jt. CDR that in the case of theft or dacoity, the goods are not lost or destroyed ; they rather enter the market for consumption, albeit stealthily, after being removed from the approved premises or the place of storage. The submission is in accord with Section 5 of the Central Excise Act in terms of which remission can be allowed when the goods are found to be deficient in quantity . Such deficiency in quantity may occur on account of loss or destruction. However, read with the rule, it must be attributable to any natural cause or unavoidable accident. Natural cause has to be understood in the sense of som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival submissions. The impugned order sustained demand of duty due on goods cleared for export but were involved in accident and were damaged. As the impugned goods were not exported in terms of the bond executed by the appellants, they are required to discharge the duty due on those goods. The duty liability on the impugned goods could be waived only if there are enabling provisions in the statute. Rule 21 of Central Excise Rules, 2002 which provides for remission of goods destroyed in accidents is subject to the condition that the damage is suffered by the excisable goods before their removal from the factory. In the instant case, the goods have been damaged after they were cleared for export and outside the factory. There are no provisions enabling authorities to remit duty on such goods. I find that the Tribunal in the case of Hind Nippon Rural Industries (P) Ltd. case (supra), had held that there is no provision for remission of the duty once goods have been cleared from the factory. The Tribunal, in the case of Siraj Sons, Bombay v. Collector of Central Excise, Bombay-I reported in 1988 (35) E.L.T. 597 (Tri.) has held that waiver of duty is not claimable if goods are dest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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