Remission of duty for fire-destroyed imported capital goods allowed under customs law before clearance for home consumption.

Imported capital goods destroyed in a fire while lying in bonded premises were held eligible for remission under Section 23 of the Customs Act, 1962 because the goods were lost or destroyed before clearance for home consumption, and prior payment of duty was not a condition precedent. The same scheme was read with Section 13, which addresses pilfered goods, and the notification conditions could not be enforced where performance had become impossible due to an unavoidable accident. The contrary precedent was treated as fact-specific and inapplicable. Remission for the imported goods was allowed and the corresponding duty demand was set aside; the claim relating to indigenous goods was not pressed, so the duty confirmed on those goods remained.

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Issues: Whether remission of duty was payable under Section 23 of the Customs Act, 1962 and Rule 21 of the Central Excise Rules, 2002 when imported and indigenous capital goods were destroyed in a fire before clearance for home consumption.

Analysis: The capital goods were destroyed in a fire accident while lying in bonded premises, and the destruction before clearance for home consumption was not in dispute. Section 23 of the Customs Act, 1962 provides for remission where imported goods are lost or destroyed before such clearance, and does not make prior payment of duty a condition precedent. Section 13 reflects the same legislative scheme for pilfered goods. The conditions of the notification could not be insisted upon after the goods had been destroyed by an unavoidable accident, since performance of an impossible obligation is excused. The reliance placed on the contrary decision was found inapplicable on its facts. The claim for remission in respect of the indigenous goods was not pressed.

Conclusion: Remission of duty on the imported capital goods destroyed in the fire was allowed, and the demand to that extent was set aside. The duty confirmed on the indigenous goods was left undisturbed.

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