Custom, Excise & Service Tax Tribunal
M/S. Barodia Plastic Pvt. Ltd vs C.C.E. Delhi-Iii on 2 September, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. II Appeal No. E/612/2010-EX(SM) [Arising out of Order-in-Original No. IV(HQ)113/Tech/ Remission/RTK/09/18529 dated 18.12.2009 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Rohtak]. Appeal No. E/2845/2011-EX(SM) [Arising out of Order-in-Appeal No. 48/VJ/RTK/2011 dated 31.01.2011 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Gurgaon]. For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) 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 should 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 Departmental authorities? M/s. Barodia Plastic Pvt. Ltd. .Appellants Vs. C.C.E. Rohtak C.C.E. Delhi-III .Respondent
Appearance:
Shri Bipin Garg, Advocate for the Appellant Shri R.K. Grover, DR for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Date of Hearing: 02.09.2015 FINAL ORDER NO. 52810-52811/2015-EX(SM) Per Ashok Jindal:
The appellant is in appeals against the impugned orders for denying the claim of duty. Consequently, confirmation of payment of duty and penalty on the appellant.
2. The facts of the case are that on 17-18/04/2002 fire took place in the factory of the appellant wherein factory building, capital goods, work in progress, finished goods were destroyed. The appellant intimated to the Department of occurrence of fire on 22.04.2002 and thereafter, filed the claim of remission of duty which was rejected on the following grounds:
a) The appellant did not take proper care to avoid fire accident,
b) Appellant has not produced the record that they have recovered the duty element from insurance company, and;
c) They have not intimated to the department within time.
3. Consequently, the claim of remission of duty was denied. In consequent to that duty is demanded by the appellant by passing another order along with interest and imposition of penalty. Aggrieved from the said orders appellant is before me.
4. The Ld. Counsel for the appellant submits that in earlier round of litigation this Tribunal has dismissed their appeal on the ground that appellant has failed to produce the evidence that they have not received duty element from insurance company. The said order was challenged by the appellant before the Honble High Court of Punjab and Haryana. The Honble High Court of Punjab and Haryana remanded matter back to this Tribunal to pass the issue on merits apart from dismissal of the appeal on the ground of non production of document that they have recovered the duty element from insurance company or not which was reported in 2015 (315) ELT 357 (P & H). He produced the document and submits that insurance company have sanctioned their claim of loss of goods and no claim has been sanctioned towards duty element. Therefore, as appellant has not recovered his claim of insurance from the insurance company they are entitled for the remission of the same. He further submits that the cause of fire has been found short circuit of electric wire which is an unavoidable incidence and the observation of the Ld. Commissioner in the impugned order is totally incorrect holding that appellant has not taken care and aided and abetted the fire accident to avoid payment of duty of excisable goods and invited fire accident. In fact, they have lost their factory building, capital goods and excisable goods. To avoid payment of duty no prudent businessmen shall invite fire accident for destroying of their factory building, capital goods and excisable goods. Therefore, the observation of the Ld. Commissioner is totally irrelevant. With regard to the intimation to the department it is the submission that fire took place on 17-18/04/2002. On 19th April appellant could not inform to the appellant. 20th and 21st April being Saturday and Sunday, so on 22nd April appellant informed to the Department. Therefore, it cannot be said that appellant was negligent by not informing to the department.
5. He further submits that on 24.04.2002 department officers came to the factory of the appellant to ascertain the fact that whether fire took place in the factory or not. He also submits that appellant intimated to the fire department and to the police regarding the incidence of fire immediately. In these circumstances, he prayed that impugned order be set aside.
6. On the other hand, Ld. AR reiterated the findings of the impugned order.
7. Heard the parties. Considered the submission.
8. In this case the claim of remission of duty has been denied to the appellant on the following grounds:
a) Non intimation to the Department within 24 hrs,
b) Appellant failed to take necessary steps to avoid fire accident, and;
c) Appellant has not produced the evidence whether they have availed the duty element in the claim from Insurance company or not.
9. With regard to the intimation to the Department it is a fact on record that fire continued from 17th to 18th April 2002. Only on 19th April 2002 appellant could have intimated to the Department but inadvertently they failed to intimate the Department. As 20th and 21st April were holidays, therefore, appellant could intimate to the Department only on 22.04.2002. Not giving intimation on 19th April will not be fetal for claim of remission of duty when it is the fact on record that fire took place in the premises of the appellant. Therefore, claim of remission of duty cannot be denied on this ground.
10. On the issue whether appellant has taken proper care or appellant has aided and abetted to invite fire accident to avoid payment of duty, I find that in the fire accident the factory building, capital goods and all excisable goods have been lost. No prudent men would invite fire accident to avoid payment of excise duty. It is a fact on record that fire accident took place due to short circuit in electric wire. The, short circuit in electric wire is not in the hand of a man who could avoid such accident. Therefore, it cannot be the reason that appellant failed to take necessary steps to avoid fire accident. Therefore, on this ground also claim of remission of duty cannot be denied.
11. On the issue of claim received by the appellant from Insurance Company appellant has produced the document on record that insurance company has not sanctioned the amount of duty as claim of insurance to the appellant. In these circumstances, it cannot be said that appellant has received duty element in their insurance claim. Therefore, on this ground also claim of remission of duty cannot be denied.
12. With these observations, I hold that appellant is entitled for claim of remission of duty. Consequently, demand of duty along with interest cannot be confirmed against the appellant and consequently, penalty is not imposable. With these observations, impugned orders are set aside. Appeals are allowed with consequential relief if any.
(Dictated and pronounced in the open court)
(Ashok Jindal) Member (Judicial)
Bhanu
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E/612/2010-EX(SM)
E/2845/2011-EX(SM)