2017 (10) TMI 1632 - AT - Central Excise

CESTAT Mumbai Denies Excise Duty Remission for Goods Destroyed by Fire, Emphasizes Compliance and Care

SUYASH LABORATORIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, THANE-II

SUYASH LABORATORIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, THANE-II - 2018 (364) E.L.T. 431 (Tri. - Mumbai) Issues: Claim for remission of central excise duty on goods destroyed by fire, compliance with guidelines for remission, denial of remission due to lack of reasonable care, delay in filing intimation, fulfillment of conditions for remission under Central Excise Rules, 2002, authority of Commissioner of Central Excise to grant remission, unavoidable circumstances for destruction, delay in filing FIR, insurance claim not a substitute for revenue implication, special privilege of remission.The judgment by the Appellate Tribunal CESTAT MUMBAI dealt with a case where the appellant, M/s. Suyash Laboratories Ltd., claimed remission of central excise duty on goods destroyed by fire. The remission was denied due to non-compliance with guidelines mandating the filing of an FIR within 24 hours of the incident. The Commissioner of Central Excise found the appellant had not exercised reasonable care and protection, leading to the denial of the remission claim.The appellant argued that the conditions under Rule 21 of Central Excise Rules, 2002 had been fulfilled, and the authority to grant remission, the Commissioner of Central Excise, should have been satisfied that the destruction was due to unavoidable circumstances. However, the impugned order clearly stated that adequate care was not taken by the appellant, and there was a delay in filing the intimation, which is a crucial step as goods become leviable to duty immediately upon manufacture.The tribunal noted that the appellant's delay in filing the intimation and relying solely on an insurance claim without considering the revenue implications did not meet the requirements for remission. The guidelines in Supplementary Instruction 2005 emphasize the importance of immediate reporting to the jurisdictional office, which the appellant failed to do. The tribunal emphasized that remission is a special privilege granted only under specific circumstances, and the appellant's actions did not justify the grant of remission.Ultimately, the tribunal found no reason to interfere with the impugned order, concluding that the appeal lacked merit and was dismissed. The judgment underscores the significance of timely compliance with procedural requirements and the need for justifiable cause in claiming remission of duties, highlighting the stringent conditions that must be met for the grant of such special privileges in excise matters.