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TMI Blog2014 (11) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of duty' is allowable when goods, cleared from factory without payment of duty for export under Bond, are destroyed due to unavoidable accident before the said goods could be exported. 3. The relevant facts that arise are that M/s Honest Bio-Vet Pvt Ltd, Ahmedabad [referred to as the Appellant] a manufacturer of excisable goods, registered with central excise authorities at Ahmedabad, cleared goods under ARE-1 for export under bond without payment of duty, on CIF terms and had taken the goods directly to the port of export i.e. JNCH, presented the Shipping Bill and 'Let Export' order was allowed. However, the goods could not be loaded on the ship for export due to Fire Accident at the port. The goods were badly damaged and the said damaged goods were allowed to be taken back to town by customs officers at JNCH, and damaged goods brought back to the factory. The assessee had informed jurisdictional Central Excise Officers whereupon the Superintendent of Central Excise along with his excise Inspector, verified genuineness of the intimation and verified the condition of the goods damaged. Thereafter, assessee filed a claim for remission of duty on 15.08.2008, which was rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Bond, the place of removal will be the port of shipment from where the goods are to be exported after 14.05.2003. It is a settled position of the law that in cases of exports of the goods, the place of removal is the load port of shipment. Accordingly, duty payable would be the value of the goods at the load port, in this case. (iv) In terms of section 5 of Central Sales Tax Act, the sale in case of exports will be completed only if the sale for such export is effected by 'transfer of documents of title to the goods, have crossed the custom frontier of India. (v) He submitted that decisions in case of Kuntal Granites ltd Vs CCE - 2007 (215) ELT 515 (Tri-Bang.) and followed in subsequent decisions like in case of Liva Healthcare Ltd v/s CCE, Nasik - 2008 (222) ELT 243 (Tri.-Mumbai) and others is a good law squarely applicable in this case requires to be upheld by this Hon'ble Bench. There is no reason to take a different view from the same in the present case, which is squarely covered by the above situation. (vi) He submitted that decisions relied by revenue mainly are the Hon'ble CESTAT's decision in the case of Hind Nippon Rural Indus (P) Ltd - 2004 (167) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be heard and to make oral/written submissions before this Larger Bench of the Hon'ble Tribunal, on aforesaid issue referred to the Bench for decision as an intervener, which was allowed by this Court confirming no objection from the authorized representative Shri P.P. Jadeja. 7. Advocate shri Saurabh Dixit submitted a written synopsis and argued with reference to provisions of section 5 of Central Excise Act 1944 and submitted that Remission is for the 'Duty Payable' and duty payable will be at port of Export in cases of clearance for exports under Bond. He argued the issue and prayed to follow the decision in case of Kuntal Granites ltd v/s C.C.E - 2007 (215) ELT 515 (Tri Bang.) and the Gujarat High Courts decision in Commissioner Vs Dynamic Industries Ltd in Tax Appeal No. 912 of 2012 decided on 25.07.2014. 8. On the other hand the Dr. Jeetesh Nagori, ld.A. R. also submitted written synopsis and argued the case reiterating the findings in the impugned OIO dt.06.02.2009. He also argued that the place of removal defined u/s 4(3)(c) is not applicable to goods cleared for export to define place of removal and it is only for the purpose of section 4 of the Central Excise Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gest that ownership and possession of the goods cleared for export remains with the manufacturer only and such ownership and possession has not changed. 10. It is clear from section 3 & 4 of Central Excise Act 1944 that duty is levied on manufacture and collected on removal of goods on the value of the goods on date, time and place from where such goods are sold for consideration. As duty is on 'manufacture', and collected on removal, the term 'removal' is more relevant, which would apply to place from where the sale takes place or the ownership of goods transferred from seller to buyer at the time of removal from such place. The provisions of Rule 21 of the Central Excise Rule 2002 provides that Remission can be allowed when goods in question have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal. Hence, in absence of any clear definition of 'Removal', in our considered view, the phrase place of removal is an important expression/factor, which has to be decided first for charging duty or considering Application for Remission of duty. In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not available for consumption. Hence, the decision of Larger Bench in case of Gupta Metal Sheets - 2008 (232) ELT 796 (Tri-LB) is also not applicable. Similarly, decision in the case of Hind Nippon Rural Indus. (P) Ltd - 2004 (167) ELT 414 (Tri-Bang) which had followed decision of Siraj Sons v. Collector - 1988 (35) ELT 597 (Tribunal). However, we find that those decisions are not applicable in the facts of this case as pertaining to period prior to amendment made in section 4(3)(C)(iii) of CEA 1944 w.e.f. 14.05.2003. 12. As goods in question were cleared under ARE-1 for export under bond, in our view the sale would be completed at load port only as per definition of 'Place of Removal' given u/s 4(3)(c)(iii) of the Central Excise Act 1944. Under these circumstances, ownership of the goods and duty liability is also extended upto the load port and if, the goods are not exported, concerned manufacturer will be required to discharge the duty liability. Therefore, 'removal' also gets extended upto the port of shipment from where the sale would be completed and when the goods were to be exported. Hence, if the goods cleared for export under Bond are destroyed before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled as required u/r 21 of Excise Rules 2002. Appellant is eligible for the Remission of duty in respect of goods for export under Bond which were destroyed before the same could be exported.
15. We find that the issue as referred to the Larger Bench, is now decided by the Honble High Court of Gujarat in Tax Appeal No. 912 of 2012 decided on 25.07.2014. Accordingly reference to the several precedents by the ld. counsel for the assessee and by the SDR, would be of academic interest, since the judgment of the Hon'ble High Court of Gujarat in the case of Commissioner v/s Dynamic Industries Ltd has considered the very same point which is in favour of the appellant.
16. In view of the foregoing, we hold that in cases where goods removed from factory for export under Bond are destroyed before export, due to unavoidable accident, then in such situation the goods destroyed are to be treated as having been destroyed before removal in terms of Rule 21 of Central Excise Rules 2002.
17. The reference is answered accordingly and Registry is directed to place the files before the concerned Bench for passing appropriate orders.
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