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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 ..... factory, leading to destruction of Plastic Moulded Furniture weighing 5,17,867.747 Kgs. (2,33,278 Nos. of Plastic Moulded Chairs) valued at Rs.3,77,18,678/- by adopting highest rate applicable in the marketing regions. 25.03.2001 The said fact of colossal fire was intimated by the Appellants to the Police, through their letters dated 25.3.2001. 25.03.2001 Sub-Inspector of Police, Thirubhuvanai Police Station, issued certificate to the effect that on 25-3-2001 at 16.30 hrs a case in Cr.No.20/2001, u/s 436 of IPC, was registered at Thirubhuvanai Police Station; that detailed investigation was done by examining the eye-witnesses and recording their statements; that investigation reveals that there was no mischief or any suspicion over the cause of fire and that this case was referred as mistake of fact on 28-10-2000, vide Final Report submitted to the Hon'ble J&M Court Pondicherry. 25.03.2001 The investigation of fire in the Appellants' factory on 25-3-2001 was conducted by Loss Prevention Association of India Ltd., Chennai, (LAP), at the instance of the Insurance Company and their Report was submitted to the Insurance Company directly, a copy of which was given to the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial was concerned, cenvat credit of duty paid on the raw material was included in the valuation thereof and the Appellants reversed cenvat credit of correct amount attributable to the inputs lying as such. 17.10.2002 Certificate from Statutory Auditors of the company was also obtained, in support of the claim that the Appellants did not consider element of central excise duty for inclusion in the valuation of semi-finished and finished goods; duty paid on inputs lying as such was considered for the said purpose. 16.05.2002 All the independent agencies like Police, Fire Brigade, LPA, TAC, etc. have come to the conclusion that fire was an accidental one, due to electrical short-circuit and no human error or negligence was there and based thereupon the Insurance Company (The Oriental Insurance Co. Ltd.), through letter dated 16.5.2002, approved the Appellants' insurance claim and it was accepted by the Appellants, through Consent letter dated 27.2.2002. 08.11.2001 Thereafter, SCN C.No.IV/16/197/2001-UCD dated 8.11.2001, was issued by Ld.ACCE, requiring the Appellants to show cause as to why duty of Rs.60,34,988/- should not be demanded from them and why penalty should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rejecting the claim for remission of duty on brand new grounds, is not sustainable based on the following judgments: 1(a) 2001 (138) ELT 189 (T) - Transpek Industries 1(b) Upheld By Supreme Court - 2002 (140) ELT A-97 (SC) 2(a) 2007 (211) ELT 105 - Carborandum Universal 2(b) Upheld by Supreme Court -2008 (223) ELT A-94 3. 2008 (12) STR 379 (T) - Jayaswal Travels 4. 2008 (230) ELT 260 (T) - Jaikisan SSK Ltd. 5. 2008 (222) ELT 443 (T) - ETA General Pvt. Ltd. (ii) That impugned order dated 18.12.2003, traversing beyond the scope of SCN dated 8.11.2001 and confirming the demand on brand new grounds is not sustainable, as SCN had proposed recovery of duty based on the allegation that Plastic Moulded Furnitures, which were said to have been destroyed by fire, appear to have been removed from the place of removal, without payment of duty contravening the provisions of Rule 9 r/w Rule 49 of CER, 1944, while the impugned Order confirms demand on the ground that the Appellants were negligent and careless in not taking steps to avoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TD. (supra) would not apply, based on the following judgments: 1. Sportking India Ltd. - 2002 (145) ELT 535 (T) 2. Shakti Spinners Ltd. - 2004 (167) ELT 364 (T) 3. Tata Coffee Ltd. - 2007 (219) ELT 551 (T) (xiii) That various judgments cited by the Appellants broadly lay down the principle of law that once goods are lost in fire or any other accident and such loss in fire is not in dispute, remission of duty is permissible unless, it is evidenced that there was deliberate act. (xiv) That, in the instant case, when independent agencies like Police Dept., Fire Brigade, Insurance Company, etc. have endorsed the fact that the cause of fire was an electrical short circuit, which could not have been foreseen, the Central Excise Dept. should also accept the same, based on the following judgments: 1. Welspun Terri Towels - 2002 (149) ELT 593 (T) 2. Pravasa SSK Ltd. - 1989 (44) ELT 664 (T) 3. Oswal S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellants have not taken precautionary preventive measures after fire accident in 1998, as advised by Tariff Advisory Committee; b) that 2001 fire was avoidable, if measures would have taken; c) that without applying for and obtaining permission, finished goods were stored outside the BSR on the day of fire; d) that the goods were stored near to tube light; e) that in spite of undisputed fact of loss of goods in fire, the Commissioner of Central Excise has to be satisfied that destruction/loss of goods was by unavoidable accident; f) Ld. JDR, has relied upon the following judgments: i) Simplex Mills Co. Ltd. - 2003 (156) ELT 486 (Tri) ii) Kissan Sahkari Chinni Mills Ltd. - 2010 (262) ELT 615 (Tri) iii) Tristarr Hortitech - 2009 (248) ELT 269 (Tri) iv) Jandial Shoe Factory - 2009 (239) ELT 203 (Tri) v) Raltronics India Pvt. Ltd. - 2008 (226) ELT 750 (Tri) vi) Mangal Sen Lal Man - 2000 (125) ELT 61 (All.) vii) Kandimalla Raghvaiah - 1985 (21) ELT 693 (A.P.) The judgments relied upon by the Ld.JDR would not apply to the facts of the present case, as discussed above. (xxii) In rejoinder, Ld. Advocate, submitted as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the year 1999 (by the representative of the insurance company) who found that after 1998, the appellants have taken necessary steps to prevent fire in future, which were upto the satisfaction of the insurance company the same has been confirmed by their letter dated 03/01/2000. Thereafter, the allegation that the appellants have not taken any steps to prevent fire in future after 1998, is not sustainable. Moreover, the cause of fire has been observed by all the authorities, (who has inspected the premises and given their report) is that the fire occurred due to short circuit of electric wire and also the fire was unavoidable. Therefore, the allegation that fire was avoidable is not sustainable without any corroborative evidence. The report of Tariff Advisory Committee wherein it was stated that no steps were taken by the appellants cannot be given credence as the said report has been made after the occurrence of the fire accident. The letter dated 03/01/2000 of insurance company is very much relevant as the officials of the insurance company had inspected the factory of the appellants in the year 1999 before occ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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