2002 (7) TMI 136 - AT - Central Excise

Tribunal grants appeal for remission of duty on goods destroyed in fire incident

The Tribunal allowed the appeal against the denial of remission of duty on goods destroyed in a fire incident. The appellants had stored finished goods in ... Remission of duty on goods destroyed by fire - approval of store room or place of storage at manufacturer's premises - intimation to revenue authority as compliance with storage approval requirementApproval of store room or place of storage at manufacturer's premises - intimation to revenue authority as compliance with storage approval requirement - Whether the appellants failed to comply with the requirement of storing finished goods in an approved store room/place under the Central Excise Rules so as to disentitle them to remission. - HELD THAT: - Rule 47 requires a manufacturer to provide and have approved a store room or other place of storage at his premises for storing goods without payment of duty. The appellants stored the finished goods within their registered factory premises in the rawmaterial godown and had given intimation to the Range Superintendent about such storage on 4398. The Revenue did not contend that the premises were outside the approved factory premises nor that permission to store was specifically denied. On these facts the Tribunal held that the storage took place within duly approved factory premises and that the prior intimation to the Range Superintendent sufficed; consequently the appellants cannot be said to have failed to comply with the requirements of Rule 47. [Paras 6]The finding that the appellants did not comply with the storage approval requirement is set aside; the storage in the rawmaterial godown within approved premises after intimation is treated as compliant with Rule 47.Remission of duty on goods destroyed by fire - Whether remission of duty on goods destroyed by fire could be denied where the goods were not removed from the factory premises. - HELD THAT: - The Tribunal accepted that there was no dispute about the destruction of goods by fire and that the goods were not removed from the factory premises. Since the goods remained within the factory premises and the storage was within approved premises (with intimation given), the condition for demanding duty on removal was not satisfied. Applying these facts, the Tribunal concluded that remission under the Rules could not be denied on the ground relied upon by the Commissioner. [Paras 6]Remission of duty is allowable; the Commissioner's order refusing remission on the stated ground is set aside.Final Conclusion: The impugned order refusing remission of duty on goods destroyed in fire is set aside; the appeal is allowed on the basis that the finished goods were stored within approved factory premises (after intimation) and remission could not be denied where the goods were not removed from the premises. Issues:- Appeal against denial of remission of duty on goods destroyed in fire due to non-compliance with Central Excise Rules.Analysis:The appeal was filed against the Commissioner of Central Excise's order declining the remission of duty on goods destroyed in a fire incident. The appellants, engaged in the manufacture of acrylic yarns, had stored finished goods in their raw material godown after informing the Range Office about the fire incident. The dispute arose as the goods were stored in a place other than the approved store room, leading to a show cause notice for denial of remission under Rule 49 of Central Excise Rules.The appellants argued that they had informed the Range Supdt. about the storage of finished goods, which was sufficient as the Range Supdt. was the appropriate authority for approving the storage place. They emphasized that the goods were stored in approved factory premises, and since the goods were not removed from the premises, no duty could be demanded. The appellants relied on previous Tribunal decisions to support their case.On the other hand, the Revenue contended that the goods should have been kept in duly approved premises, and since the appellants stored them elsewhere without permission, the appeal should be rejected. However, it was noted that the permission to store the goods in the raw material godown was not denied by the Range Supdt., and the goods were stored within the approved factory premises.The Tribunal found that the appellants had complied with Rule 47 of Central Excise Rules by storing the goods in their raw material godown within the approved factory premises after informing the Revenue authorities. As the goods were not removed from the factory and the loss was undisputed, the impugned order denying remission was set aside, and the appeal was allowed.