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TMI Blog2011 (5) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... uch in bonded store room and only a minimum quantity was outside the bonded store room, it is a fact all the goods were within the factory premises of the appellant. Thus going through the case records and independent reports by all the five authorities, who found that the fire occurred due to unavoidable circumstances, therefore, no reason for denial of claim of remission of duty - in favour of Assessee. - E/3540/03 & E/399/04 - A/333 & 334/2011/EB/C-II - Dated:- 11-5-2011 - Ashok Jindal, P R Chandrasekharan, JJ. Appellant Rep by: Shri M H Patil, Adv. Respondent Rep by: Shri.S M Vaidya, JDR, Per: Ashok Jindal 1. These appeals are filed by the appellants for denial of remission of duty on goods lost in fire and thereafter on demand of duty on the goods lost in fire. 2. The issue involved in the instant appeals is as to whether remission of duty on finished and semi-finished goods lost in fire is deniable, on the ground that such fire was avoidable, in a case where police, fire officers, surveyors, insurance company, Loss Prevention Association of India (LPAI) Tariff Advisory Committee (TAC) have opined that the fire was accidental and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed goods and machineries stored in the Godown of the firm The Supreme Industries Limited at No.90, 91, Sanyasikuppam village, Thirubuvanai, was actually involved in the fire accident occurred at 2.45 hours on 25-3-2001 and the damage was estimated to Rs.8,18,81,000/-, as per Fire Report No.3/2001 dated 25-3-2001 of Villianur Fire Station. The cause of fire was under investigation. The firm reported that estimated loss due to fire is around Rs.8,29,81,000/-. The said certificate was issued for insurance purpose. 08.05.2001 Appellants submitted an application to the Ld. Commissioner for remission of duty on goods lost/damaged, under copy to DCCE and Supdt. of Central Excise, accompanied by detailed fire Report, evidencing damage of finished goods in fire accident on 25.3.2001. 29.05.2001 The Appellants also received the Report dated 29.5.2001 from the Divisional Fire Officer on the arrangement made for fire fighting by the Fire Service Dept. of Pondicherry. 15.02.2002 Divisional Fire Officer, Fire Service Dept, Govt. of Pondicherry, through his letter dated 15.2.2002, concluded the investigation and, accordingly, informed the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Proper Authority to decide the issue afresh, after observing the principles of natural justice. 13.05.2003 Ld. Commissioner, through SCN, proposed to reject the application for remission of duty based on the allegations: (a) that finished goods were not stored in the store room for finished goods, but were stored in other places, not meant for storing the finished goods (b) that finished goods appeared to have been stored upto a height of 7 to 8 feet, almost very close to tube lights, which were on and the heat or spark caused by these tube lights might have caused the fire; (c) that the fire was not due to unavoidable accident, but was caused by negligent acts of commission and omission on the part of the Appellants in observing the proper safety measures in storing the finished goods. 06.06.2003 Appellants made exhaustive submissions and based thereupon they prayed for allowing remission of duty. 26.08.2003 Commissioner rejected the claim dated 8.5.2001 for remission of duty of Rs.60,34,989/- on the goods lost/destroyed in fire on 25.3.2001, based on various findings. 18.12.2003 Ld. Commissioner conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se for rejection of their claim of remission of duty. (vi) That certificate dated 13.5.2001 of Sub Inspector of Police clearly says that there is no mischief or any suspicion over the cause of fire and hence, the fire cannot be considered as an avoidable accident; (vii) That Divisional Fire Officer, Pondicherry Fire Service Dept. concluded, on completion of investigation, that the supposed cause of fire might be short circuit of electricity. (viii) Likewise, Loss Prevention Association report also clarified that the cause of fire could be attributable to electrical fault. (ix) That TAC Report dated 18.5.2001 and Joint Final Survey Report dated 27.2.2002 also concluded the cause of fire to be an electric short circuit. (x) That an electrical short circuit can neither be foreseen nor can it be avoided, as it is independent uninterrupted power supply and the same is not attributable to any human error; (xi) That the major quantum of goods lost in fire was very much in BSR and only some quantity was outside the BSR, but within the factory premises, and, hence, the ratio of Tribunal judgment in Simplex Mills Co. Ltd. [2003 (156) ELT 486 (TRI) would not apply. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mind of Ld. Commissioner, it could have been got clarified by extending investigations or seeking information from other independent agencies like Police, Fire Brigade, Insurance Company, etc. (xix) That the Appellants came to know the grounds of rejection (exterior to SCN) only when Order dated 26.8.2003 was received by them and hence, with no option available,to substantiate that the findings of Ld. Commissioner were incorrect, the evidences were submitted along with written submissions,which have been brushed aside on the ground of late submission; (xx) That all the independent agencies accept the unavoidable accident of fire and loss of goods and even insurance company has settled the claim and, hence, denial of remission and confirmation of duty is incorrect based on the following judgments: 1. Mafatlal Industries - 2003 (154) ELT 543 (T) 2. M.J. Electricals - 1993 (63) ELT 193 (T) 3. Hindustan Cables Ltd. - 2006 (198) ELT 527 4. On the other hand, Shri S.M.Vaidya, Ld.JDR, appeared for the Dept. vehemently argued taking recourse to the reasoning of the Order-in-Original as under: a) that the Appellants have not taken pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d outside BSR was also destroyed, in evidence thereof letter of Tariff Advisory Committee Installation report dtd.4.5.2001 indicates the loss of goods in finished goods stores only. f) In any case, the concept of BSR was done away with and entire factory is treated as BSR. 5. Heard both sides. 6. After hearing both sides, we find that the Ld. Commissioner has denied the remission of duty on the goods lost in fire on the ground that such fire was avoidable. 7. It is the fact on record that in the year 1998, a fire took place in the factory of appellants, thereafter the appellants were asked to take precautionary preventive measures to avoid accident in future by Tariff Advisory Committee. The only ground for denial of remission of duty is that the appellants have not taken any steps to prevent fire as advised by Tariff Advisory Committee (TAC) in the year 1998. 8. We have gone through the case records and after going through the case records, we find that the insurance company, who has sanctioned the claim of goods lost in fire has inspected the premises of the appellant in the year 1999 (by the representative of the insurance company) who found that aft ..... X X X X Extracts X X X X X X X X Extracts X X X X
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