Remission of central excise duty on export goods destroyed in transit before customs clearance and final removal

Export goods destroyed in an accidental lorry mishap before presentation of export documents for customs clearance are not treated as finally removed from the factory for duty purposes. In that context, the place of removal is the point at which customs presentation occurs, not the factory gate, so central excise duty remission remains available where destruction is due to an unavoidable accident before export clearance. A contrary earlier view was said not to govern because it did not consider the relevant statutory provisions in the same context.

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Issues: Whether remission of central excise duty was available where export goods were destroyed in an accident during transportation before export, and whether such goods could be treated as removed from the factory for the purpose of duty liability.

Analysis: The goods were dispatched for export and were destroyed in an accidental lorry mishap before the export documents were presented to the Customs authorities. On that footing, the goods had not reached the stage at which the export sale could be treated as complete. The place of removal, in the context of export goods, was therefore not the factory gate but the point at which the export documents were presented for customs clearance. Since the destruction occurred before that stage and was due to unavoidable accident, the claim for remission could not be denied. The earlier view relied on by the Revenue was held not to govern the matter because it had not considered the relevant statutory provisions in the present context.

Conclusion: The assessee was entitled to remission and the duty demand could not be sustained.

Final Conclusion: The appeals succeeded and the impugned orders were set aside with consequential relief.

Ratio Decidendi: Export goods destroyed in transit before customs presentation are not treated as finally removed for duty purposes, and remission of duty is available where destruction occurs due to unavoidable accident before the stage of export clearance.

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