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Bidar Sahakari Sakkare Karkhane Ltd. Versus CCE, Belgaum

2015 (10) TMI 2206 - CESTAT BANGALORE

Denial of remission of duty - Appellants were storing molasses in the steel tanks erected - Puncture of the drain nipple - Held that:- There is no dispute about the bursting of the drain nipple attached to the storage tank and the consequent loss of molasses. The only issue required to be decided is to whether such rupture could have been avoided by the appellant or not. The drain nipple had bursted due to the high static pressure exerted on it by the stored molasses resulting in loss of the mol .....

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s of Rule 21 of CENVAT Credit Rules, the same would make the said rule inoperable and redundant. No assessee would cause loss of its own final product for the reason of not paying the excise duty. As such, I am of the view that as long as the accident is not deliberate and there is no mala fide on the part of the assessee to make the accident occur resulting in loss of the goods, the assessee would be entitled to the remission of duty in terms of the provisions of Rule 21. As such, I am of the v .....

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rected in their factory. 2. As per the facts on record, the drain nipple of one storage tank, storing molasses to the extent of 2226.00 MTs was punctured on 13/04/2008. The said puncture of the drain nipple, according to the appellant, occurred on account of the high static pressure exerted on it. As a result of the puncturing of the drain nipple, the entire molasses stored therein were leaked in spite of the efforts made by the employees to control such leakage. 3. The said loss of molasses was .....

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hey cleanse the bottom and check the weld joints and after satisfaction, the molasses are stored. However he admitted that the tank was around 31 years old and if the nipple would have been replaced, the accident would not have occurred. 4. The appellant also filed the information about the loss of molasses to their insurance company M/s. United India Insurance Co. Ltd. and stacked their claim with them. The Insurance Company rejected their claim on the ground that corrosion of the nipple was no .....

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ority submitting that the rupture of the nipple had occurred on account of the static pressure exerted on it by the stored molasses. Even as per the Surveyor s report of the Insurance Company, the corrosion in the nipple led to the opening of the welding joint and the resultant loss. There is no negligence attributable to them by the Insurance Company and their claim stands rejected on account of the fact that the corrosion of the nipple was not covered by their Insurance Policy. They also relie .....

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