Customs, Excise and Gold Tribunal - Delhi
Commr. Of Cus., Icd vs Shree Balaji Garments Industries on 22 September, 2000
Equivalent citations: 2000(122)ELT569(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. The brief facts of the case are that the respondent was duly approved as 100% Export Oriented Unit by the Board of Approval and was issued a LOP dated 24.07.1991 for manufacture and export of readymade garments from NEPZ. They imported raw materials availing of the benefit of exemption from duty in terms of Notification 339/85-Cus., dated 21-11-1985, later superseded by Notification 133/94 as per the condition of which goods were allowed clearance into the Zone without payment of duty for utilisation in the manufacture and export of goods within one year. The respondents did not make any export. They reported in their letter dated 03.02.1992 that a fire had broken out in their premises on 29.01.1992 in which most of the goods were destroyed and the probable cause of the fire was rain and electric short circuit. The Superintendent of Customs issued a letter dated 03.03.1992 demanding customs duty of Rs. 50,44,042/- on the goods imported but not utilised in manufacture and export, and the Unit applied for waiver of customs duty vide their letter dated 10.03.1992. The Unit was allowed to be debonded, but waiver was not permitted and instead show cause notice was issued for confiscation of stock of non-duty paid raw materials and finished goods lying unutilised, proposing recovery of duty on the above and proposing recovery of proportionate duty of Rs. 49,33,197.50 on the raw materials destroyed in the fire together with interest and proposing imposition of penalty on the respondents' unit as well as on its proprietor. The notice was adjudicated by the Commissioner of Customs who vide the impugned order dropped the charges, holding that there is no evidence of wilful negligence or default on the part of the respondents' Unit or its employees or agents, resulting in loss of goods in the fire and, therefore, duty is not leviable in terms of Notification 339/85-C.E. Hence this appeal by the Revenue.
2. We have heard Shri Mewa Singh, learned SDR and Shri J.M. Sharma, learned Consultant. Clause (ix) of Notification 339/85 stipulates that:
"(ix) Subject to the satisfaction of the Collector of Customs, duty shall not be leviable in respect of the following goods, namely :-
(a) goods lost or destroyed not due to any wilful act, negligence or default of the importer, his employee or agent;
(b) goods damaged or deteriorated not due to any wilful act or negligence or default of the importer, his employee or agent and, therefore, not suitable for use in the production of goods or packaging within the zone".
3. The adjudicating authority has relied upon the police report that the electric short circuit was the cause of the fire and upon settlement of insurance claim which was made only after ruling out wilful negligence or default on the part of its Unit or employees or agents. He has also noted that the Customs officers visited the site and did not find any evidence to show that there was negligence. In the appeal before us, the Department does not allege that the material on record exists to show any negligence. Instead the ground raised in the memorandum of appeal is that the onus lies on the importer to prove that he has not acted in a negligent manner, if he wants to claim the benefit of Notification and in the instant case, the importer has not discharged such burden. The further ground of appeal is that negligence is evidenced from the failure of the respondents to insure the goods for customs duty. We find that there is no stipulation in the Notification that the goods imported thereunder should be insured for customs duty. Therefore, we hold that the Commissioner is correct in his finding that since there is no legal obligation on the part of the importer to get the goods insured for customs duty, failure to do so, does not amount to negligence for the purpose of holding that the imported goods are liable to duty.
4. In the light of the above, we see no legal infirmity in the order of the Commissioner and accordingly uphold the same and reject the appeal. The cross-objections abates.