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TMI Blog2024 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the goods were not insured for duty element does not prove that there was any negligence on the part of the appellant. The issue stands settled in as much as in similar set of facts in appellant s own case of M/S AMERICAN POWER CONVERSION (INDIA) PVT. LTD. (now known as M/s. Schenider Electric IT Business India Pvt. Ltd.) VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE, BANGALORE. [ 2023 (10) TMI 1422 - CESTAT BANGALORE] has held 'as per the above provisions when the Assistant/Deputy Commissioner of Customs is satisfied that the imported goods have been lost, the question of demanding duty on these goods does not arise.' In the present case since the fire occurred due to unforeseen reasons and the goods were destroyed in the fire, the question of demanding duty does not arise. In the result, the impugned order is set aside - Appeal allowed. - DR. D.M. MISRA, MEMBER (JUDICIAL) AND MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL) Shri Ravi Raghavan, Advocate for the Appellant Shri H. Jayathirtha, Authorised Representative for the Respondent ORDER The Appellants, M/s. Schneider Electric IT Business India Pvt. Ltd, are a 100% Export Oriented Unit (EOU) engaged in the manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fire accident which took place in their factory premises. He further submitted that a list of capital goods imported and locally procured goods which were damaged in the said fire incident was given to the department vide letter dated 18.05.2010 for seeking remission of duty under Section 23 of the Customs Act, 1962 read with Rule 21 of the Central Excise Rules, 2002 along with permission for scrapping the said goods. It is also stated that the appellant informed the Police department and Fire department regarding the said occurrence. 3.1 The Learned counsel submits that the officers of Central Excise visited the premises of the Appellant once again on 27.05.2010 and 11.06.2010 and a Mahazar dated 27.05.2010 was drawn by the Officers. It is further claimed that the raw materials and finished goods in the warehouse were not in usable condition since the same were destroyed due to use of water to douse fire, which was further confirmed vide letter dated 17.09.2010 by the Head-Quality department of the Appellant. Details of raw materials procured locally under CT-3, duty paid raw material, WIP goods, finished goods etc., that were lost in the fire accident were also submitted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STAT-BLR-CU) allowed the remission of duty on the goods damaged due to occurrence of fire in the factory. It is submitted that impugned order has denied the remission of duties alleging that the Appellant failed to obtain an insurance cover on the duty forgone along with the value of the goods even if the goods were procured without payment of duty in terms of Circular No.99/1995 dated 20.09.1995. It is submitted that Circular No. 99/1995 dated 20.09.1995 which casts an obligation on the Warehouse Keeper to ensure the safe deposit of the goods deposited in the warehouse and to ensure that the goods are insured for at least the value equal to the duty foregone on the same. It does not provide that Warehouse Keeper to obtain an insurance cover on the duty forgone along with the value of the goods. The circular itself at para 3(v) states that 'it may be' ensured that the goods deposited are fully insured for the value equal to the duty element. As far as imports by an EOU is concerned, the B-17 Bond is an all-purpose bond executed by the EOU covering the imported/warehoused goods also. Hence, remission of duty cannot be denied merely on the basis that the importer has not take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be used in the manufacture of export goods. There has not been instance or even any allegation by department regarding the non-fulfilment of such conditions. In this regard, the Appellants rely on the decision of the Apex Court in the case of BPL Display Devices Ltd. v. CCE, Ghaziabad reported in 2004 (174) E.L.T. 5 (S.C.) which held that exemption benefit to raw materials cannot be denied when they are denied before they were used in manufacture if they were intended to be used in manufacture. In the above fact situation, it is erroneous to consider the destruction of capital goods and raw materials procured under CT-3 procedure as misuse under Notification No. 22/03-CE dated 31.03.2003. The Appellants also place reliance on the following decisions wherein under similar fact situation of accidental fire in factory which resulted in the destruction of raw materials and capital goods, imported with duty concession, it was held that demand for duty foregone on ground that these goods were not used for intended purpose is not sustainable. BPL Display Devices Ltd v. CCE, Ghaziabad 2004 (174) E.L.T. 5 (S.C.) Sami Labs v. CC, Bangalore 2007 (216) E.L.T. 59 (Tribunal) upheld by Karna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handling or storage in the manufacturer s premises then it shall be deemed that the goods have not been used for the intended purpose. In the present case, domestically procured goods were destroyed when they were being stored in the manufacturer s premises and therefore, the appellant cannot seek remission under Rule 21 of the Central Excise Rules, 2002 as the condition of permission stipulates that the appellant would be liable to pay excise duty if the goods are not used for the intended purpose. Notification 1/95, under which the goods have been procured, stipulates that the goods have to be used in the manufacture of specific products which are required to be exported. Inasmuch as, in the present case, this condition is not satisfied, the appellant is liable to discharge duty on the raw materials destroyed during storage in the manufacturer s premises. The decision of the Hon ble Calcutta High Court in Antarctica Ltd. (supra) also supports the department s contention that, once the goods are procured duty-free under exemption Notifications, the provisions of Section 23 of the Customs Act, will have no application. The decision of the Hon ble Apex Court in S.K. Pattanaik s cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also. The reliance placed on the case laws also are to the effect that since the goods have not been properly insured the question of remission does not arise. 7. In the present appeal the fact that the fire accident took place and intimation given to the department is not under dispute. Section 23 Sub-Section 1 reads as follows: 23. Remission of duty on lost, destroyed or abandoned goods .- (1) Without prejudice to the provisions of Section 13, where it is shown to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs that any imported goods have been lost (otherwise than as a result of pilferage) or destroyed, at any time before clearance for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall remit the duty on such goods. Thus as per the above provisions when the Assistant/Deputy Commissioner of Customs is satisfied that the imported goods have been lost, the question of demanding duty on these goods does not arise. This issue in the case of a 100% EOU in similar set of facts and circumstances was considered by this Tribunal in the matter of Symphony Services Corporation India Pvt. Ltd. (supra), a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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