1983 (11) TMI 197

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..... t arrive. 2. As the sale and purchase of the benzene was under Chapter X procedure and the clearance was given concessional duty under Notification No. 34/73-C.E., the Assistant Collector of Central Excise, Ernakulam Division, Cochin, began proceedings to demand duty under rule 196 on the 21138 litres of benzene which did not reach destination. The duty demanded was Rs. 57,389.67. The Assistant Collector held that it had not been shown satisfactorily that the benzene had been lost or destroyed by natural causes or unavoidable accident during transport from the manufacturer of benzene to the factory of Hindustan Insecticides or during handling or storage in the premises of Hindustan Insecticides, he found no reason to treat the loss as inte .....

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..... fication and so the exemption should still hold good and the demand was liable to be quashed. 4. The learned counsel for the department rejected the appellant's arguments. He said the word "lost" was qualified by the words "by natural causes" and "by unavoidable accident" just as much as the word "destroyed" was. The loss, he reasoned, must be the effect of natural causes or of unavoidable accident. Any other interpretation would invite serious danger to public revenue because the loss by human agency would still qualify for exemption, an untenable proposition for reasons which are obvious. He refuted the appellant's arguments that intention was all that was necessary to earn exemption under Notification No. 34/73-C.E. by pointing out that .....

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..... vered under the rule (196). In this case, the officer would not have been so satisfied as the loss was not attributable to natural causes or unavoidable accident. 6. The intention under Notification No. 34/73-C.E. must be understood only as a legal device to allow clearance under concession because when it (concession) is being taken (at the time of clearance), actual use is obviously a physical impossibility. But mere intention can never be a basis for such a concession, notwithstanding the appellant's claim, because then no concession-goods need be really used as intended, once the intention is declared at the time of clearance, an absurd state of matters. We hold that actual use must follow intention if the concession is to be earned, u .....

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