The appellant, a 100% Export Oriented Unit (EOU), imported goods ...

Imported goods destroyed by fire at 100% EOU; duty element uninsured but no negligence. As per rules, duty can't be demanded if goods lost.

Case Laws     Central Excise

August 1, 2024

The appellant, a 100% Export Oriented Unit (EOU), imported goods and stored them in a licensed warehouse u/s 58 of the Customs Act, 1962. These goods were destroyed in a fire accident at the factory premises. Although the goods were insured for their value, the duty element was not covered. The insurance company settled the claim after determining the fire was caused by unavoidable circumstances. The department also recorded the destroyed goods. Despite the duty element not being insured, there was no negligence on the appellant's part. As per Section 23 of the Customs Act, 1962, read with Rule 21 of the Central Excise Rules, 2002, and Notification No. 22/2023-CE dated 31.03.2003, when goods are lost, the question of demanding duty does not arise. The Appellate Tribunal, in a similar case, held that if the Assistant/Deputy Commissioner of Customs is satisfied that the imported goods have been lost, duty cannot be demanded. Since the fire occurred due to unforeseen reasons, the demand for duty is set aside, and the appeal is allowed.

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