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TMI Blog2016 (1) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... an Kumar Singh (Supdt.), A.R., for the Department Per Mr. Anil Choudhary : The appellant, a manufacturer of shoes, is in appeal against the order of the Commissioner of Central Excise, Kanpur dated 26-03-2007, by which the claim for remission of duty on footwear lost in fire accident which occurred on 22-05-1999, was rejected raising a demand of ₹ 19,67,342/-. 2.1 The brief facts of the case are that the appellants are engaged in the manufacture of Footwears and Parts thereof falling under Chapter 64 of Central Excise Tariff Act, 1885. The appellants unit is registered with the Central Excise department vide Registration No. 176/Footwear/R/III/Agra/93-94. The goods manufactured are cleared by them for export as well as for home consumption. 2.2 That due to an electric short circuit in night hours on 22-05-1999 at around 01.00 A.M. the appellants factory situated at Mill Compound, Jeoni Mandi, Agra caught fire and burnt in uncontrolled fire. In this incident the factory building, machines, raw materials, finished goods, office equipment and books of accounts records were destroyed. The news of this incident was reported by the daily news papers namely the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erintendent, Central Excise, Range-III, Agra on 05-07-1999 wherein they have given the particulars from 23-05-1999 to 30-06-1999, because the quantity manufactured and cleared during the period 01-04-1999 to 22-05-1999 could not be worked out, as all the records as well as finished footwears were also burnt in the said fire accident. Hence, the appellants have taken NIL opening balance as on 23-05-1999. Photocopy of said RT- 12 return alongwith its forwarding letter is enclosed with Paper-Book. 2.13 The Superintendent, Central Excise, range-III, Agra vide his letter No. PF/TSF/R-III/98/1064 dated 29-10-1999 given direction to the appellants for furnishing the information about the total clearances of finished good i.e. Footwear and Footwear Parts from 01-04-1999 to 22-05-1999, total production of each commodity from 01-04-1999 to 22-05-1999, and balance as on 22-05-1999, total production of each commodity from 01-04-1999 to 22-05-1999, and balance as on 22-05-1999 of each commodity. 2.14 In compliance to the said letter dated 29-10-1999 of the Superintendent, Central Excise, Range-III, Agra, the appellants have replied vide their letter No. TSF/99-00 dated 01-11-1999 wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... npur, through proper channel, for granting remission of duty ₹ 13,83,282/- involved on the destroyed goods during the fire accident. The appellants have further submitted that their application for remission of duty may kindly be considered against the show cause notice issued to them. A photocopy of said remission application dated 07-02-2000 is enclosed in P.B. 2.19 The appellants have submitted their defence reply dated 09-02-2000 before the Commissioner of Central Excise, Kanpur against the Show Cause Notice C. No. PF/TST/R-III/Agra/99/13 dated 19-11-1999 where in they have inter-alia submitted that the goods have been lost in unavoidable fire accident for which remission claim is pending and the goods have been destroyed within the factory, therefore demand of duty is not sustainable. A photocopy of the said defence reply is enclosed in PB. 2.20 The appellants have received another Show Cause Notice C. No. V(30)TECH/IV/36/2000/922 dated 20-01-2003 proposing rejection of the said remission application. The appellants submitted their defence reply dated 12-02-2003 wherein they have inter-alia submitted that as per the proviso to Rule 49 of Central Excise Rules, 1944 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 5, that due to electric short circuit in the factory. There was nothing in the said fire report regarding non availability of proper arrangement to prevent the fire accident. In absence of any proper evidence, the allegation of non-availability of proper safety and security arrangement in the appellants factory premises was baseless. 2.23 The appellants have filed insurance claim with the New India Assurance Company Limited, Civil Lines Branch, Agra on 11-01-2000 for the total amount of ₹ 2,54,43,385/- wherein the amount of raw material, finished goods and goods in process ₹ 1,49,60,000/- was also included. However the amount of Central Excise duty was not claimed in the said claim as the goods were lost inside the factory premises. The appellants have not received any payment from the said insurance company under the settlement of their claim. Photocopy of appellants reply dated 16-02-2003 is enclosed in PB. 2.24 Without prejudice to the other submissions, the appellants have submitted their common written submissions dated 14-07-2003 wherein they have inter-alia submitted that the goods manufactured by the appellants are cleared for export, as well as for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have urged various grounds, inter-alia, the loss of goods during fire accident has not been disputed by the learned adjudicating authority, but application for remission of duty has been rejected on the technical and procedural grounds. The series of incidents as well as information at the various stages to the various Govt. department like, police and fire brigade are treated as proper source of informations and actions. But ignorance of the same is not legal and proper. It is well settled that assessee cannot be deprived from his legal right on the grounds of technicalities. 3 (ii) The remission claim has been rejected by the learned Commissioner on the sole ground that no statutory records for the relevant period were submitted by the appellants with the department to ascertain the actual loss of excisable goods. Whereas the appellants had immediately informed the Superintendent of Central Excise, Range-III, Agra on 22-05-1999 and thereafter to the Assistant Commissioner, Central Excise, Agra as on 24-05-1999. The occurrence of fire accident was reported by the national local news papers on 22-05-1999 and 23-05-1999. It was always open to the department to conduct enquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, raw materials and finished goods speaks ipso facto that the entire quantity of finished goods available in the factory was burnt in the said accident. Hence, denial of remission claim and demand of duty is bad and fit to be set aside. 3 (v) The circumstantial evidences of the fire accident were self explanatory to establish that entire goods lying in the factory have been lost. When this factual position of fire accident and loss of entire goods was brought to the notice of the department by way of furnishing of intimations, it was always open to the department to make verification of quantify of the damaged goods keeping in view the revenue interest. Hence, rejection of the remission application, putting entire responsibility upon the appellant is not proper. 3 (vi) The RT- 12 returns filed by the appellants with the concerned range office are statutory records, which could have been ascertained by the learned adjudicating authority by way of conducting enquiry from the concerned range office, as entire records were destroyed in the said fire accident and no statutory records were available with the appellants. The appellants have informed their aggregate value of clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. Commissioner and further relies on the ruling of the Joint Secretary of the Government of India in Bagaha Chini Mills Ltd. at 1991 (55) E.L.T. 140 (G.O.I.) wherein, in the case of claim for remission of duty on goods lost or destroyed, being molasses stored by the assessee in Kutcha Pits situated in flood-prone area without taking the permission of department and goods have been lost due to flood. It was held that the loss is attributable to lack of due diligence on assessee s part and not due to natural causes. Remission granted by the Commissioner (Appeals) was set aside. It was urged that the remission is not grantable just because goods were not removed from the factory. Unless is lost, in unavoidable accident, so the demand of remission cannot be granted. Reliance is also placed on SMB Ruling of this Tribunal in the case of Hindustan Insecticides Ltd. Vs. Collector of Central Excise, Cochin 1988 (33) E.L.T. 575 (Tribunal) wherein the assessee had bought Benzene from Hindustan Steel, Bhilai and the spirit was sent in two railway tankers. There was a transit loss of 186 litres, whereas one of the two wagons did not arrive. The Revenue had started proceedings t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t issued by the fire authority wherein, they have accepted the cause of fire as electric short circuit. The Police Authority has also accepted the reason of fire as electric short circuit. Under the circumstances, we hold that the ld. Commissioner have erred in substituting in his own findings for the cause of fire accident. We also take notice of the fact that the insurance company have also accepted the reason of loss and have settled the claim of the appellant. We also rely on the ruling of Hon ble Allahabad High Court in the case of Commissioner of Central Excise Vs M. Kumar Udhyog (P) Ltd. 2014 (306) E.L.T. 19 (All.) wherein the question before the Hon ble High Court, was whether it was correct and proper for this Tribunal to hold that the fire having been caused in respondent s factory on account of electric short circuit, was covered by expression unavoidable accident for the purpose of remission of excise duty. The Hon ble High Court analyzing words natural causes and unavoidable accident observed that these words have to be interpreted in their ordinary/natural connotation in reasonable manner to sub-serve object of legislature in introducing remission of duty. U ..... X X X X Extracts X X X X X X X X Extracts X X X X
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