2009 (10) TMI 308 - AT - Central Excise

Tribunal grants duty remission for flood-damaged goods in landmark decision

TULSI INTERMEDIATES PVT. LTD. Versus COMMR. OF C. EX. & CUS., VADODARA

TULSI INTERMEDIATES PVT. LTD. Versus COMMR. OF C. EX. & CUS., VADODARA - 2010 (251) E.L.T. 225 (Tri. - Ahmd.) Issues:Claim for remission of duty due to goods destroyed in flood.Analysis:The case involved M/s. Tulsi Intermediates Pvt. Limited, engaged in chemical production, seeking remission of duty amounting to Rs. 3,00,088/- for goods damaged in floods. The Commissioner rejected the claim citing lack of precautions taken by the appellants during the flood, emphasizing the need for anticipatory measures. The appellants had also claimed insurance, including Central Excise duty of Rs. 4,28,694/-. The Tribunal referred to a previous case, Dharampal Satyapal Limited v. CCE, Noida, where negligence in safeguarding goods was not permitted as a basis for claiming remission.The consultant for the appellants argued that they had indeed taken steps to protect the goods, presenting evidence from a worker at the plant and the surveyor's report detailing the flood incident. The surveyor's report highlighted the extent of damage caused by the flood, including the dilution of various stocks due to inundation. The consultant also pointed out that the insurance surveyor had determined the excise duty payable only on raw materials, not finished goods, which the appellants had initially claimed.The Departmental Representative (DR) supported the Commissioner's stance, questioning the adequacy of precautions taken by the appellants during the flood. However, the Tribunal noted that the goods were damaged, insurance was claimed, and the surveyor had calculated the excise duty payable on raw materials only. The Tribunal emphasized that the amount received from insurance was already paid by the appellants and pertained to Central Excise duty. Referring to the Dharampal Satyapal case, the Tribunal ruled in favor of remission for duty on finished goods based on the surveyor's detailed report and the certification of losses due to the flood.The advocate for the appellants argued that even if compensation was received from the insurance company, remission should still be granted. The Tribunal differentiated the present case from a previous ruling under Rule 49 of the Central Excise Rules, highlighting the relevance of the Dharampal Satyapal case. Consequently, the Tribunal held that the appellants were eligible for remission of duty on the finished goods amounting to Rs. 3,00,088/-.In conclusion, the Tribunal allowed the remission of duty on the finished goods damaged in the flood, emphasizing the evidence presented, the insurance claim specifics, and the relevant legal precedents to support their decision.