Remission of duty for flood-destroyed finished goods is admissible when loss is proved, despite insurance compensation.

Remission of duty is allowable for finished goods destroyed by flood where the loss is satisfactorily proved by evidence such as a surveyor's report and local authority certification. Allegations of negligence and receipt of insurance proceeds do not, by themselves, displace a factual finding of destruction by inundation. A precedent under the earlier excise rule was held inapplicable because the claim arose under Rule 21 of the Central Excise Rules, 2002. On the evidence, the remission claim stood established and the assessee succeeded.

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Issues: Whether remission of duty was admissible on finished goods destroyed in flood.

Analysis: The goods were admittedly damaged in the flood and the evidence included the surveyor's report and the local authority certificate confirming the loss. The Commissioner's reliance on alleged negligence and the receipt of insurance proceeds did not displace the factual finding that the finished goods were destroyed by inundation. The Tribunal also noted that the cited precedent under Rule 49 of the Central Excise Rules, 1944 was not applicable, as the present case arose under Rule 21 of the Central Excise Rules, 2002. On the evidence, the case for remission stood established.

Conclusion: Remission of duty on the finished goods was held admissible in favour of the assessee.

Final Conclusion: The assessee succeeded on the substantive claim for remission of duty on the finished goods destroyed by flood.

Ratio Decidendi: Where excisable finished goods are destroyed by a natural calamity and the loss is satisfactorily evidenced, remission of duty is allowable under Rule 21 notwithstanding the receipt of insurance compensation.

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