TaxTMI 
TaxTMI 
2008 (7) TMI 669
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.... exemption Notification No. 67/95 dated 16-3-1995, as amended, from payment of duty on 'Cut-Tobacco'. The appellants procured raw tobacco and cut the same within the factory premises and used the same for manufacture of Cigarettes. The appellants filed an application with the department for remission of duty vide their letter dated 18-8-2005. The said remission application arose on the ground that the appellant's factory was flooded due to heavy rains on 26/27th July, 2005 and raw materials as well as cut-tobacco was damaged. The said remission application was dismissed by the adjudicating authority, hence this appeal. 3. The learned Counsel appearing on behalf of the appellant submits that it is undisputed that there was heavy rain....
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.... so, the appellant cannot claim the remission of duty. As such, the so called damaged goods were never inspected by the authorities. The appellant's contention that they have informed the authorities vide their letter dated 18-8-2005, seems to be misplaced. 5. In rejoinder, the learned Counsel would submit that the appellant's factory is under physical control of the excise authorities. It is his submission that once the factory is under physical control, the entire receipt and inputs of the final product in the factory is under the physical supervision of the excise authorities posted at the factory premises. He draws my attention to the Govt. of India, Central Board of Revenue, Manual of Departmental Instruction on Excisable Manuf....
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....s the jurisdictional Commissioner to be satisfied that not only that the goods were damaged but would be destroyed so that they could be of no further use. However, I am unable to satisfy, at this stage that the goods were damaged and also destroyed as required by the law. What GPI have done with the impugned cut tobacco after removal, is also not known since no permission for destruction has been sought. Similarly, there is no evidence that the assessee has taken any proper precaution to store the said goods and protect it from the rain. It further raises reasonable doubt whether the said tobacco, was really damaged as intimation was given to the Range Officer sitting within the factory premises after 49 days of the rains on 26-7-2005 when....
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.... to comprehend a situation wherein the assessee is under physical control of the excise department and the department is not aware of clearances made by the assessee. It is undisputed that the factory premises of the appellant was under physical control. Further, it is also undisputed that the goods are to be cleared or removed under the supervision of Central Excise officers posted at the appellant's factory. It is also undisputed that the Central Excise officers are posted round O'clock, in the appellant's factory premises. The findings of the adjudicating authority that the Central Excise officers were not aware of the said clearance of cut tobacco seem to be misplaced. It is undisputed that the cut tobacco was damaged in natural calamit....
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....om the above reproduced letter that the appellant on 18-8-2005 intimated the authorities regarding the damages caused to cut tobacco. The clearance of the said damaged cut tobacco had taken place on 22-8-05. On the perusal of the letter dated 18-8-05, it is seen that approximately 6000 kgs. of cut tobacco was lost due to heavy rain on 22/27-7-2005. Hence, the authorities were very well aware that there was approx loss of 6000 kgs. of cut tobacco due to flood. 8. I find that the adjudicating authority's finding that they are not able to come to conclusion of exact loss seems to be wrong. It is seen that the order of Division Bench of the Tribunal in the case of Milton Plastic Industries (supra) squarely covers the issue. I may ....