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TMI Blog2016 (3) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... examined by the Insurance Surveyor who reported that 11786.30 mtrs. of fabrics was damaged due to rain water and the balance fabrics was in good condition. The surveyor also observed that the said damaged goods were beyond recovery. In 2006 the appellants claim to have discovered a certain chemical which could be used to make the damaged fabric fit again. They claimed that the said damaged fabrics were recovered and part of it was exported and other part was cleared on payment of applicable duty in DTA. A demand of duty was raised for the said damaged fabrics asserting that the claim of recovery of fabric was wrong. The original adjudicating authority observed as follows: - "I find that the Noticee received raw material under CT-3 without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2006, they could got a certain chemical from M/s Colourtex Industries Ltd., which was effective and it can remove the water marks from the wool blended fabrics. The appellants claimed that treating the said chemical they could process the entire stock of damaged fabrics to sellable condition. The appellants claimed that they exported 14397 mtrs of the said fabrics during the period November, 2006 to February, 2007 and cleared 2922.4 meters of the fabrics to DTA during May, 2007 on payment of duty. A show-cause notice was issued to the appellants seeking to demand duty on 11786.30 mtrs of fabrics on the grounds that it was not possible to verify the correctness of the claim that the goods which have been cleared are re-processed goods. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance from factory for export and were brought back to factory in the year 2003. At the material time, it was felt that there was no method of re-process of the said goods and the said goods were deteriorated with time. However, in year 2006, they learnt about certain chemicals which can be used for processing of such fabrics and could do so simultaneously. He claimed that they had processed the entire lot and cleared the same for export and for DTA clearance on payment of duty. He argued that they had informed the Revenue immediately on receipt of the damaged goods in the year 2003 and the fact that they had claimed insurance cannot come in their way to ability of process and clear the damaged goods. He further argued that Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same goods unfit for reprocessing in 2003, is not sustainable in view of the facts that the technology keeps improving and any claim made in 2003 is based on the appellants knowledge at the material time. The appellants have argued that in 2006, they come to know the chemicals which can reprocess the said materials and they reprocessed the material. We do not find that there is anything which cannot be taken at face value. The appellants have not only shown the details of clearance of reprocessed materials in export/DTA on payment of duty and Revenue has not challenged that fact. Revenue has only raised the suspicion that the records produced by the appellant are not authenticated. The assertion of the appellant cannot be set aside mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds were in transit to the point of export. Again, it is not in dispute that these damaged slabs were scrapped and abandoned under intimation to the department. The SCN was issued in July 2006 under Rule 19 of the Central Excise Rules, 2002 in terms of the bond executed by the EOU. In terms of this bond, the EOU was bound to export the goods and, in the event of default, to pay duty thereon. I have found no such default' on the part of the appellants inasmuch as the intended export of the granite slabs did not come through on account of accident, which was beyond the control of the party. The very fact that insurance claim was made by them proved this nature of the subject transactions. In the absence of willful default of export of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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