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TMI Blog2024 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... bond manufacturing sanction order dated 24.03.2000 under Section 65 of the Customs Act, 1962. The private bonded warehouse license and the in-bond manufacturing sanction order were valid till 09.03.2015. 2. Meanwhile, a fire accident took place in the premises of the Appellants at IDF 4 and IDF 5 on 05.05.2010. The officers visited the site on 06.05.2010 and Mahazar was drawn recording the proceedings. Thereafter, the appellant had claimed remission of duty of Rs.2,12,09,971/- as duty forgone on Capital goods, raw materials, work-in-process (WIP) stock and finished goods. The Commissioner referring to the provisions of remission under Section 23 of the Customs Act 1962 read with Rule 21 of the Central Excise Rules, 2002 and in terms of Notification No. 22/2023-CE dated 31.03.2003 read with the B-17 bond, held that the appellants were required to use the said goods for the purpose specified in the said Notification. He also held that it is the responsibility of the appellant for the safety of the goods and having not taken proper care, the conditions laid down as per Board Circular No.99/1995 dated 20.09.1995 the goods were not fully insured for the value equal to the Customs Duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value (in. Rs.) Duty foregone (in Rs.) 1. Capital goods procured under CT-3 6,12,07,909/- 63,04,415 2. Duty free raw material procured under CT-3 1,47,23,032/- 14,35,623/- 3. Duty paid raw material 36,50,435/- 3,47,188/- 4. WIP Stock 3,24,56,499/- 73,44,581/- 5. Finished goods 2,55,34,332/- 57,78,162/- Total 13,75,72,207/- 2,12,09,969/- 3.2 The learned counsel referring to Rule 21 of the Central Excise Rules, 2002, submits that the Rule provides remission of duty on goods which are lost or destroyed due to natural causes or unavoidable accidents and there is no pre-condition appended to the said Rule which makes the subsisting insurance, a requisite to avail the remission. Hence ,the Commissioner is only required to satisfy himself about the nature of cause which destroyed the goods and in the instant case, the undisputed fact is that the goods were destroyed due to a fire which is nothing but an unavoidable accident. It is submitted that once the requirements under Rule 21 of the Central Excise Rules, 2002 are fulfilled remission ought to be granted. Any other condition outside the Rule 21 would be an extraneous condition for grant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance coverage for the 'duty forgone' there would have been no requirement of the provisions pertaining to remission of duties, thus making such provisions redundant. Additionally, in case the Appellant had the insurance coverage of 'duty forgone', the department would have still denied the remission of duties stating the 'double benefit'. It is submitted that the warehouse licence issued to the Appellants has been renewed by the Commissioner which clearly shows that the Commissioner was satisfied that the Appellants have taken sufficient measures for the safety of the capital goods. It is therefore submitted that denial of remission on the ground of non-fulfilment of the conditions of the Circular No.99/1995 dated 20.09.1995 providing for grant/renewal of warehousing license is not sustainable and the impugned order is liable to be rejected. The Appellant claims that these conditions are procedural in nature and substantive benefit should not be denied only on the ground of non-fulfilment of the procedural conditions. In this regard, reliance is placed upon the judgment of Hon'ble Supreme Court in the case of Mangalore Chemicals & Fertilizers Ltd. vs. Deputy Commissioner repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the Appellant took sufficient precautions to avert any such event. However, due to unforeseen circumstances, the fire accident occurred at the factory premises. In this regard, reference is invited towards the fact that the insurance company also conducted their thorough investigation and was satisfied to the effect that fire was caused due to unavoidable circumstance. Once an insurer settles the claim, it can be safely presumed that sufficient precaution was taken by the assessee-appellant. In this regard, the Appellant relies upon the following authorities: * Supreme Industries Ltd v. CCE, Pondicherry - 2011 (271) E.L.T. 241 (Tri) * Supreme Industries Ltd. v. CCE, Daman - 2009 (236) E.L.T. 81 (Tri-Ahm) In view of the above, it is prayed that the appeal may be allowed. 4. The Authorized Representative on behalf of the Revenue submitted that the Board Circular No.99/1995 dated 20.09.1995 stipulated that in the case of 100% EOU where the goods are deposited in the warehouse are to be fully insured against all natural calamities. It is argued that since the goods are imported free of duty their safety has to be safeguarded by insuring the goods for the duty forgone an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iolated. 5. Heard Both sides. The only issue to be decided is whether the appellant who is an 100% EOU is eligible for remission of duty under Section 23 of the Customs act 1962 read with Rule 21 of the Central Excise Rules, 2002. 5.1 The undisputed facts are that the goods that were imported by the appellant who is an 100% EOU and stored in the warehouse licenced under Section 58 of the Customs Act, 1962 were destroyed in a fire accident. It is an admitted fact the goods were insured only for the value of the goods and not for the duty foregone at the time of import. It is also a fact that due to unforeseen circumstances, the fire accident occurred at the factory premises and the insurance company after thorough investigation, having satisfied that the fire was caused due to unavoidable circumstance, settled the claim of insurance. The department also had drawn Mahazar and taken stock of the goods that were destroyed in the fire. The fact that the goods were not insured for duty element does not prove that there was any negligence on the part of the appellant. 5.2 The issue stands settled in as much as in similar set of facts in appellant's own case of M/s. American Power Conve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal observed that the appellant was eligible for remission of duty which was upheld by the Hon'ble High court of Karnataka where it was held that: "The assesse is 100% export oriented unit. It has imported goods without paying duty. If they have performed their export obligations, they were not liable to pay the duty before that obligation could be performed, when the goods were warehoused, there was a fire accident; in the fire accident, the entire goods which were imported were destroyed. It is nobody's case that there was any pilferage of these goods. Under these circumstances, when the claim of remission is made under Section 23 of the Act, legal requirements to be fulfilled by the assessee to claim remission stands fully satisfied. The Commissioner was wholly in error in denying the said benefit on the ground that the said benefit is not entitled to EOU under the notification and that the assesse did not take care of the goods imported and also on the ground that the Managing Director of the asseesse admitted discrepancy in the figures. All these factors which weighed with the Commissioner are totally extraneous for considering the claim for remission under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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