Insurance receipt not transaction value for excise duty where fire loss was remitted and no duty basis existed.

Insurance receipts for sugar destroyed in an accidental factory fire were not treated as the transaction value for central excise duty where remission had already been granted on the basis that the loss was due to an unavoidable accident and not negligence. The revenue's attempt to sustain the duty demand on the destroyed quantity failed because no specific provision supported valuing the lost goods by reference to the insurance amount. The remission order displaced the duty demand, leaving the demand unsustainable.

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Issues: Whether the insurance amount received for sugar destroyed in a fire could be treated as the transaction value for levy of central excise duty, and whether remission of duty on the lost goods was sustainable.

Analysis: The goods had been lost in an accidental fire in the factory and remission had already been granted on the footing that the loss was due to an unavoidable accident and not due to negligence or want of precautions. The revenue sought to treat the insurance receipt as the value of the goods lost and to sustain the duty demand, but no specific provision was shown to support such a treatment. The insurance amount was not the transaction value of the goods for purposes of excise duty, and the remission order displaced the duty demand on the destroyed quantity.

Conclusion: The demand was unsustainable and the appeal failed.

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