TaxTMI 
TaxTMI 
2010 (9) TMI 486
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.... audit of the records of the appellants, it was observed by the department that the appellants had received an amount of Rs. 7,89,210/- as insurance amount on the quantity of excisable goods cleared for export and lost in transit, a show cause notice dated 23-8-2007 came to be issued for necessary action for recovery of the said amount of Rs. 1,28,798/-. The proceedings initiated pursuant to the issuance of the said show cause notice were contested by the appellants. However, the original authority confirmed the demand and imposed the penalty. The appeal against the same did not yield any fruitful result to the appellants, hence the present appeal. 3. It was the case of the department that in the course of the audit of the financial records of the appellants, it came to the knowledge of the department that the amount of Rs. 7,89,210/- was received by the appellants as insurance amount for lost materials out of the quantity of excisable goods which were sought to be exported. The goods were cleared under the bond but were never exported on the ground of loss thereof in transit and there was recovery of the value thereof from the insurance company. 4. It was the defence o....
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.... goods. He further submitted that theft of goods does not amount to loss of goods within the meaning of the said expression under the statutory provisions comprised under the excise statute. 7. The facts that the goods were sought to be cleared for export under bond and in that regard there was compliance of Rule 19 of the Central Excise Rules, 2002 are not in dispute. The first point of dispute relates to the absence of proof of actual export of the goods. While it is the contention of the appellants that the documents in the form of ARE-I, bill of lading and shipping bill sufficiently established the same and that it stands corroborated by the undisputed fact that on account of loss of goods, the appellants had received the insurance amount. On the other hand, it is the case on behalf of the department that the said documents by themselves do not establish the factum of actual export of the goods and in the absence of the proof of actual export, the appellants are liable to pay the duty. 8. It is undisputed fact that the documents which are prepared in the form of ARE-I, bill of lading and shipping bill the copies of which are placed on record at pages 26, 27 and 28 r....
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....le the party to export the goods lawfully. The documents which are necessary for lawful export would not apparently establish the factum of export. Being so, the documents in the nature of ARE-I, bill of lading and shipping bill prepared prior to the actual export of the goods cannot be sufficient to establish the factum of export. 11. Undisputedly, the appellants are unaware of the place where the goods were allegedly stolen, and the loss is stated to be on account of the goods were stolen. No documents in relation to the insurance claim satisfaction has been placed on record. Admittedly, no FIR was lodged by the appellants. It was sought to be contended that the appellants came to know about the loss of goods only from the persons who were suppose to receive the goods in foreign country. However, no document in that regard has been placed nor even the date regarding receipt of such information from the foreign country has been disclosed. The identity of the person who might have transmitted the alleged information has also not been disclosed. In other words, even if the department wanted to make enquiry in that regard, the basic facts necessary for such enquiry were not dis....
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....n, albeit stealthily, after being removed from the approved premises or the place of storage. The submission is in accord with Section 5 of the Central Excise Act in terms of which remission can be allowed when the goods are found to be "deficient in quantity". Such deficiency in quantity may occur on account of loss or destruction. However, read with the rule, it must be attributable to any natural cause or unavoidable accident. 'Natural cause' has to be understood in the sense of some natural phenomenon i.e. vagary of nature or some act of nature like fire, flood or a similar natural calamity. Besides, goods like molasses may also lose in quantity while in storage for environmental reasons. The act of forcibly removing the goods by any means - non-violent or violent -amounting to theft or dacoity under the Indian Penal Code cannot be said to be a natural cause. 'Theft' has been defined in the Indian Penal Code to mean dishonestly taking of any moveable property out of the possession of any person without his consent. Theft is robbery if, in order to the committing of the theft, or in committing the theft, or in carrying away or attempting to carry away property obtained by the th....