Remission for goods destroyed in accidental factory fire allowed where the loss arose from an unavoidable accident.

Remission of duty under Rule 21 of the Central Excise Rules, 2002 was held admissible for semi-finished and finished goods destroyed in a factory fire caused by an electric short circuit, because remission turns on destruction by an unavoidable accident and the fire itself was not disputed. Allegations of negligence did not defeat remission, as an accidental fire is not treated as avoidable merely because some omission is alleged unless the negligence is deliberate. The earlier identical view allowing remission for goods lost in fire was followed, and the rejection of remission was set aside to that extent. No remission was claimed for raw materials.

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Issues: Whether remission of duty was admissible under Rule 21 of the Central Excise Rules, 2002 in respect of semi-finished and finished goods destroyed in a factory fire caused by an electric short circuit.

Analysis: Remission under Rule 21 depends on the satisfaction of the authority that the goods were destroyed by an unavoidable accident. The fire and the destruction of goods were not in dispute. The finding that the accident could have been controlled and was therefore avoidable was not accepted, as an accidental fire cannot be treated as avoidable merely because some negligence or omission is alleged, unless the negligence is deliberate. The same view had been taken earlier in an identical matter, where remission was allowed for semi-finished and finished goods lost in fire.

Conclusion: Remission was admissible for the destroyed semi-finished and finished goods, and the rejection order was set aside to that extent. Remission was not granted for raw materials, as that part was not contested.

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