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2007 (2) TMI 518 - AT - CustomsRemission of duty - 100% EOU - Due to fire accident - loss of the certain capital goods, raw materials, work in progress and semi-finished goods both imported and indigenously procured - Applicability of Explanation to Rule 6 of Central Excise - manufacturing herbal extracts, chemicals etc. - HELD THAT:- In the present case, the goods were destroyed not during the transport from the place of procurement to the manufacturer’s premises or during handling or storage in the manufacturer’s premises. The Revenue has no problem in remitting the Customs duty u/s 23 of the Customs Act. As regards the goods indigenously procured, both capital goods and raw materials are involved. The fire accident occurred in the production premises there is ample evidence and that fact is not under dispute. This clearly indicates that the raw materials have already been issued for the intended purpose. Therefore the materials lost in fire accident were in the form of ‘work in progress’. The Revenue’s contention and the Commissioner’s (Appeals) view that even the ‘work in progress’ material would be covered by the Explanation to Rule 6 is not correct. Further, we would like to point out that according to Rule 21 of the Central Excise Rules, there is a provision for remission of duty in respect of the goods lost or destroyed by natural causes for unavoidable accidents. Even under Section 23 of the Customs Act, there is a provision of remission of Customs duty on goods lost or destroyed before their clearance. Therefore it does not stand to reason that the duty on indigenously procured duty free raw materials should be demanded when they are destroyed due to unavoidable accident/natural causes on the specious ground that they have not been used for the intended purpose. We find that the order of the Original authority is well reasoned. Therefore we hold that the raw materials/capital goods which are in the premises of production would not be hit by the Explanation to Rule 6. The above goods have actually been used for the intended purpose. The accident is not the making of the appellant and it should be considered to be an act of God. Hence it is not correct to demand the duty forgo. We allow the appeal with consequential relief.
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