2015 (9) TMI 410 - HC - Central Excise

High Court Upholds Remission on Duty for Goods Destroyed in Flood

The High Court upheld the Tribunal's decision allowing remission on duty for goods destroyed due to flooding. The Court emphasized the department's ... Remission of duty - Loss of goods due to flood - Application of the assessee came to be rejected on the ground that the goods were destroyed in the absence of the officer of the Central Excise Department - Held that:- Undoubtedly after the goods became contaminated and though several reminders were sent to the department as aforesaid, the department chose to remain silent and as such the Respondent was left with no other option, but to destroy the goods as there was a risk of entire production area being contaminated and hazardous to the human-being. These goods were destroyed only after giving intimation to the department. The department woke up after the goods were destroyed and issued a notice to the Respondent to remain present for hearing on his application for remission and after that the said application was rejected on the ground that the goods were destroyed in the absence of the officer/representative of the department. The Chapter 18 of the Excise Manual provides for a time-bound programme in which the officer of the department is expected to act in such matters. Undoubtedly, in the present case the department has not acted in the time-bound programme. - The department cannot be permitted to take advantage of its own wrong - Decided against Revenue. Issues:Appeal against CESTAT order allowing remission on duty for goods destroyed in absence of department officer.Analysis:The appeal challenged the CESTAT order allowing remission on duty for goods destroyed due to flooding. The appellant's factories were flooded, leading to the destruction of finished goods worth approximately Rs. 27.70 lakhs. Despite informing the department and sending reminders, there was no response. The appellant destroyed the goods after giving intimation to the department. The department later rejected the remission application, citing destruction in the absence of their officer. The Tribunal allowed the appeal, relying on precedents, emphasizing the department's inaction and the risk of contamination. The High Court noted the department's failure to act within the prescribed time frame, leading to the destruction of goods. It held that the department cannot benefit from its own inaction and agreed with the Madhya Pradesh High Court's view that the department's procedure was unjust. The High Court found no substantial legal question and dismissed the appeal, upholding the remission on duty for the destroyed goods.