Excise duty on goods destroyed before removal is not payable merely because a remission application was not filed.

Finished excisable goods destroyed in a factory fire before removal were not liable to central excise duty, because duty in these circumstances is attracted on removal and not merely on manufacture. The Tribunal treated the absence of a formal remission application as a procedural lapse that did not, by itself, sustain a duty demand on admittedly destroyed goods. The demand was therefore held unsustainable and relief was granted to the assessee.

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Issues: Whether central excise duty was payable on finished goods destroyed in a fire when the goods had not been cleared from the factory and no remission application had been filed.

Analysis: The destruction of the finished goods in the fire was undisputed. The Tribunal followed earlier decisions holding that failure to file a formal remission application is only a procedural lapse and does not by itself justify confirmation of duty on goods that have been destroyed before clearance. Since excise duty is attracted on removal and not merely on manufacture in these circumstances, demand on admittedly destroyed goods could not be sustained.

Conclusion: The duty demand on the finished goods destroyed in fire was not justified and the finding was in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where finished excisable goods are admittedly destroyed before removal from the factory, non-filing of a remission application does not, by itself, create liability to pay duty on those goods.

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