2003 (2) TMI 121 - AT - Central Excise

Summary

Issues: Claim for remission of duty due to damage of goods caused by natural calamities, verification of Insurance claim for duty elements.

Analysis:

Claim for Remission of Duty:
The case involves a Public Sector Undertaking facing damage to goods due to heavy rain causing water logging in their factory. The appellant informed the Assistant Commissioner about the damage and subsequently salvaged a quantity of goods. The appellant requested permission for destruction of the damaged goods, which was not granted, leading to the goods being destroyed without permission. A show-cause notice was issued proposing confirmation of duty demand and imposing a penalty. The Commissioner rejected the remission claim due to delayed intimation and uncertainty regarding insurance claim coverage of duty elements. The appellant argued that the delay in assessing damage was due to the water logging, supported by evidence of incessant rain and photographs. The appellate tribunal found merit in the appellant's contention, emphasizing that the delay in intimation should not hinder a legitimate claim for remission, especially considering the nature of the calamity. The tribunal noted that the insurance claim admitted by the appellant supported the loss due to heavy rain, warranting remission under Rule 49 despite procedural delays. The Commissioner's decision was set aside, affirming the appellant's right to claim remission based on the circumstances and evidence presented.

Verification of Insurance Claim for Duty Elements:
The Commissioner raised a concern about the ambiguity regarding whether the insurance claim received by the appellant included duty components. The appellant clarified by presenting documents indicating that the insurance claim was solely for the goods' cost, excluding duty. As the Commissioner did not examine these documents, the tribunal remanded the matter for verification of the duty elements in the insurance claim. The appellate tribunal emphasized that the remand was solely for this specific purpose to determine the refund of duty deposited by the appellant based on the insurance claim details. By setting aside the impugned order and remanding the issue for further examination, the tribunal ensured a comprehensive review of the insurance claim's coverage of duty elements, providing clarity on the refund entitlement to the appellant. The appeal was disposed of with directions for the Commissioner to address this specific aspect, ensuring a fair assessment of duty refund eligibility based on the insurance claim specifics.