Custom, Excise & Service Tax Tribunal
M/S Periwal Exports vs Cce, Jaipur Ii on 29 October, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING/DECISION : 29/10/2014. Excise Appeal No. 33 of 2011 (SM) [Arising out of the Order-in-Appeal No. 364(CB)/CE/JPR-II/2010 dated 30/09/2010 passed by The Commissioner (Appeals II), Central Excise, Jaipur.] For Approval and signature : Honble Shri Rakesh Kumar, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s Periwal Exports Appellant Versus CCE, Jaipur II Respondent
Appearance Shri Mansi Garg, Advocate for the appellant.
Shri R.K. Mishra, Authorized Representative (DR) for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 54241/2014 Dated : 29/10/2014 Per. Rakesh Kumar :-
The facts leading to filing of this appeal are, in brief, as under.
1.1 The appellant are a 100% EOU engaged in manufacture of handicrafts. On 08/11/07, they cleared a consignment consisting of 72 bags of handicrafts for export which was to be made through the gateway port of Mumbai. The goods were dispatched in a truck. However, on 10/11/07, the truck met with an accident in which due to fire, not only the truck but the goods loaded in the truck were totally destroyed. The transporter filed an FIR before the Police Authorities on the same day i.e. on 10/11/07 and the Jurisdictional Superintendent, Central Excise was also notified about the loss of the goods on 12/11/07. The appellant, thereafter, filed an application for remission of duty on the goods in terms of Rule 21 of the Central Excise Rules, 2002 before the Jurisdictional Additional Commissioner, Central Excise. The Additional Commissioner vide order-in-appeal dated 08/09/09 rejected the application for remission of duty which was Rs. 4,05,048/-. The remission application was rejected on the ground that the loss had occurred after the removal of the goods while in terms of Rule 21 of the Central Excise Rules, the remission of duty can be permitted only when it is shown to the satisfaction of the Commissioner that the goods 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 the removal of the goods, while in this case the loss due to fire has taken place after the removal. The Additional Commissioner also observed that in addition to this, the goods were destroyed when the driver with the truck was staying at his residence, which shows that due care was not taken to protect the goods and the loss cannot be attributable to unavoidable accident.
1.2 On appeal being filed to Commissioner (Appeals) against this order of the Additional Commissioner, the Commissioner (Appeals) vide order-in-appeal dated 30th September, 2010 rejected the appeal holding that the loss has taken place after the removal of the goods. Against this order of the Commissioner (Appeals), this appeal has been filed.
2. Heard both the sides.
3. Ms. Mansi Garg, Advocate, the learned Counsel for the appellant, pleaded that in terms of Rule 21 of the Central Excise Rules, remission of duty in respect of the goods lost or destroyed by natural causes or due to unavoidable accident can be allowed when the loss or destruction or unavoidable accident has taken place at any time before removal, that in this case, the loss of the goods was due to unavoidable accident, but the same was before the removal of the goods, as in case of goods cleared for export, the place of removal is the port from where the goods are exported, that in this regard the Division Bench of the Tribunal in the case of Kuntal Granites Ltd. vs. CCE, Bangalore reported in 2007 (215) E.L.T. 515 (Tri. Bang.), after taking into account Section 5 of the Central Sales Tax Act 1956 and also Section 4 (3) (c) of the Central Excise Act, 1944, has held that in case of the goods cleared for export, the place of removal is the port from where the goods are to be exported and, therefore, when the goods were lost in transit, the remission of duty under Rule 21 would be admissible, that same view has been taken by the Tribunal in the case of CCE, Coimbatore vs. Sree Narasimha Textiles Ltd. reported in 2009 (239) E.L.T. 86 (Tri. Chennai) and that in view of the above, the impugned order is not correct.
4. Shri R.K. Mishra, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and cited the judgment of the Tribunal in the cases of S.V.G. Exports (P) Ltd. vs. CCE, Chennai III reported in 2008 (232) E.L.T. 305 (Tri. Chennai), Hind Nippon Rural Indus. (P) Ltd. vs. CCE, Bangalore reported in 2004 (167) E.L.T. 414 (Tri. Bang.); CCE, Jaipur II vs. Hindustan Zinc Ltd. reported in 2012 (275) E.L.T. 136 (Tri. Del.) and Meghmani Industries Ltd. vs. CCE, Ahmedabad I reported in 2007 (218) E.L.T. 50 (Tri. Ahmd.), wherein a contrary view has been taken and it has been held that when the goods were cleared for export and were lost during transit, the remission of duty under Rule 21 of the Central Excise Rules would not be admissible. Beside this he also pleaded that in terms of Rule 21 of the Central Excise Rules, the remission of duty can be permitted in respect of the goods lost or destroyed by natural causes or due to unavoidable accident when such loss or destruction takes place at any time before removal, that the words used in Rule 21 are at any time before removal and not at any place before the place of removal, that in terms of Section 4 (3) (cc), the time of removal even in respect of the goods sold from the depot or from consignment agents premises or from the customer premises, is the time when such goods are cleared from the factory, that in view of this, the words at any time before removal have to be readwith the provisions of Section 4 (3) (cc), that since in this case the loss of the goods was after the time of removal, the remission of duty in terms of Rule 21 would not be admissible and that in view of this, there is no infirmity in the impugned order.
5. I have considered the submissions from both the sides and perused the records.
6. The undisputed facts are that the loss of the goods cleared for export and in respect of which the duty involved was Rs. 4,05,048/-, took place after the removal of the goods from the factory during transit when the truck in which the goods were loaded, met with an accident and all the goods including the truck were destroyed by the fire. The remission of duty has been claimed under Rule 21 of the Central Excise Rules, 2002. Rule 21 is reproduced below :-
Rule 21:- Where it is shown to the satisfaction of the Commissioner that goods 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, he may remit the duty payable on such goods, subject to such conditions as may be imposed by him by order in writing.
7. From plain reading of this Rule, it is clear that remission of duty in respect of the goods lost or destroyed due to natural causes or by unavoidable accident is permissible only when this loss or destruction has taken place at any time before removal. Thus the point of time when the loss or destruction should take place is the time before the time of removal. In my view the words at any time before removal cannot be read as at any place before the place of removal; they have to be read as at any time before the time of removal. In terms of the provision of Section 4 (3) (cc) of the Central Excise Act, 1944, the time of removal even in respect of the goods sold from the depot or from consignment agents premises or from any other place, is the time when the goods are cleared from the factory. Therefore, in respect of the goods cleared for export, even if the place of removal is the port from where the goods are exported, the time of removal would be the time when the goods have been cleared from the factory and, therefore, if the goods are lost during transit, for the purpose of Rule 21, the time of removal would have to be treated as the time at which the goods were cleared from the factory. In the judgments of the Tribunal in the cases of Kuntal Granites Ltd. vs. CCE, Bangalore (supra) and CCE, Coimbatore vs. Sree Narasimha Textiles Ltd. (supra) the provisions of Section 4 (3) (cc) have not been considered and these judgments have read the words at any time before removal as at any place before the place of removal, which is not permissible while interpreting a statutory provision. In view of this, I follow the judgments of the Tribunal in the cases of S.V.G. Exports (P) Ltd. vs. CCE, Chennai III reported in 2008 (232) E.L.T. 305 (Tri. Chennai), Hind Nippon Rural Indus. (P) Ltd. vs. CCE, Bangalore reported in 2004 (167) E.L.T. 414 (Tri. Bang.), CCE, Jaipur II vs. Hindustan Zinc Ltd. reported in 2012 (275) E.L.T. 136 (Tri. Del.) and Meghmani Industries Ltd. vs. CCE, Ahmedabad I reported in 2007 (218) E.L.T. 50 (Tri. Ahmd.), wherein a contrary view has been taken and it has been held when the goods after clearance from the factory for exports are lost in transit, the remission of duty under Rule 21 would not be admissible. The appeal is, therefore, dismissed.
(Dictated and pronounced in open court) (Rakesh Kumar) Member (Technical) PK ??
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