2024 (2) TMI 817 - AT - Central Excise

Tribunal Orders Reconsideration of Remission Claim, Highlights Need for Comprehensive Review and Retroactive Error Rectification.

Climax Synthetics Pvt Ltd Versus C.C.E. & S.T. -Vadodara-ii

The Tribunal set aside the impugned orders and allowed the appeals, remanding the case to the Adjudicating Authority for reconsideration. It directed a ... Rejection of claim of the appellant for remission of duty on the finished goods which were destroyed in fire - whether the consequential demand confirmed by the Adjudicating authority is correct or otherwise? - HELD THAT:- It is found that the Adjudicating Authority rejected the claim for remission of duty made by the appellant, on the assumption and presumption that the appellant have not taken proper steps to avoid the fire accident. From the facts which is revealed in detail from the survey report of the survey conducted by the insurance company, it was found that the fire accident has taken place due to short circuit and immediately when the fire broken out the appellant’s staff have properly taken the steps to call the fire extinguisher. Therefore, the defense of the appellant appears to be reasonable. It is found that one of the reasons given for rejection of remission claim is that there is discrepancy in the plot number in the Central Excise Registration of the appellant. However, the appellant have submitted that there was an inadvertent mistake in their registration which was subsequently rectified - once a mistake has been rectified, the rectification should be considered retrospectively as the same is inadvertent mistake. Accordingly, the correct registration should be considered for processing the remission claim. The learned Commissioner must reconsider the overall case and re-adjudicate both the matters of remission as well as demand of duty. Needless to say that the appellant have relied upon numerous judgments on the identical issue, same also need to be considered while passing the de-novo orders - Appeals are allowed by way of remand to the Adjudicating Authority. Issues involved:The issue involved in the present case is whether the Competent Authority rightly rejected the claim of the appellant for remission of duty on finished goods destroyed in a fire, and whether the consequential demand confirmed by the Adjudicating authority is correct.Details of the judgment:*Issue 1: Rejection of remission claim*The appellant's counsel argued that the fire was due to a short circuit, and the appellant had taken all necessary steps to extinguish it. The insurance claim was granted after a thorough survey and forensic inspection, indicating no malice or negligence on the appellant's part. The rejection based on a discrepancy in plot numbers on the registration certificate was deemed a minor mistake, rectified in a subsequent certificate. The Tribunal noted that the Adjudicating Authority's rejection assumed lack of proper fire prevention steps, contrary to evidence from the insurance survey. The absence of departmental inspection and reliance on insurance findings highlighted the need for reconsideration. The rectification of the registration mistake should retroactively apply, prompting a reevaluation of the remission claim and duty demand.*Issue 2: Consideration of evidence*The Tribunal emphasized the importance of considering all relevant documents and inspections related to the insurance claim in assessing the remission claim. The lack of departmental inspection, coupled with detailed insurance and forensic surveys, indicated the need for a more comprehensive review by the Commissioner. The rectification of the registration error was deemed significant, warranting a retrospective application for processing the remission claim. The Tribunal directed the Commissioner to reevaluate the case, taking into account the appellant's reliance on previous judgments on similar issues.Decision:The impugned orders were set aside, and the appeals were allowed for remand to the Adjudicating Authority for reconsideration in light of the observations made by the Tribunal.