TaxTMI 
TaxTMI 
2023 (8) TMI 1266
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....he Adjudicating Authority held that Rule 21 of Central Excise Rules has no bearing at all for the plant and machinery and raw materials which were lost and damaged in fire. He also held that EOU is liable to pay the duty forgone along with interest on the goods which were imported without payment of Excise Duty. On the locally procured inputs which were procured without payment of Excise Duty, he held that the same is required to be paid. Subsequently, Show Cause Notice was issued demanding payment of Customs Duty saved at the time of imports and Central Excise duty saved in respect of the indigenously procured raw materials. After due process, the demands were confirmed along with interest and penalty. Being aggrieved, the Appellant is before the Tribunal. 2. The Learned Advocate appearing on behalf of the Appellant submits that in case of the capital goods destroyed, the same were procured and were being used in the factory premises for the period ranging from 3 years to 12 years as can be observed from the machinery details given at Page No. 22 to 24 of the Appeal Paper Book. Therefore, he submits that the imported capital goods were very much put to use and the same were instr....
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....nt has procured them between 2002 to 2007 as per the Bill of Entry details given by them at Page 23 to 25 of the Appeal Paper Book. Since the Department has also made use of this detailed statement to arrive at the demand of Customs duty on such imported capital goods, it clarifies that the Department does not dispute that these capital goods were procured about 3 to 10 years prior to the fire accident. Therefore, admittedly these capital goods were being properly used in the factory premises for production of the finished goods which were exported by the EOU. As per the Notification No. 52/2003, if the Capital goods are not installed and used within a period of one year from the date of import, the same would amount to contravening the conditions set up under this Notification. As per the factual matrix discussed above, the capital goods have been used for more than three to ten years. Hence, the Department cannot claim that the conditions of Notification No. 52/2003 were not fulfilled. 8. Further it is seen that in case of Laxai Avanti Live Sciences Pvt. Ltd. Vs. CC., C. Ex & S.T. Hyderabad cited supra, the Tribunal has held as under: 8.The main ground for rejecting remission ....
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.... 23 deals with remission of duty when goods are lost otherwise than as a result of pilferage. The Oxford dictionary meaning of remission is 'cancellation of a debt, charge or penalty'. The word used in Section 23 is 'remission' and not 'refund'. Neither does Section 13 nor Section 23 state that in order to claim remission duty has to be first paid by the assessee. The goods when imported under notification will get duty exemption only upon fulfilling the conditions. Therefore, even though exempted at the time of import, a demand can be raised when the conditions are violated. In the instant case, department has raised the duty demand for the reason that appellant did not fulfill the conditions of the notification. Then the question arises, under the circumstances, whether appellant has to pay the duty or can be granted remission of duty. Section 23 when read as a whole (i.e., with both sub-sections and the proviso) it is clear that there is no pre-condition to pay the duty before claiming remission. It would be meaningless to call upon the assessee who has lost the goods imported, to pay the duty and then request for remission of the same. The Section would then be of no purpose. T....
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....ssee is entitled to claim remission of the entire duty payable on the said goods imported. As the goods is not lost or destroyed, the assessee made a request for relinquishment of the title to the goods with the intention of abandoning the same. By such abandonment and relinquishment, the title in the imported goods is divested and the title vests with the Department. The Tribunal on a proper consideration of the facts keeping in mind the legal principles involved has rightly set aside the order passed by the original authority as well as the Appellate Commissioner granting remission of duty to the assessee. It is in accordance with law. Therefore, no error is made out for us to interfere. In that view of the matter, the substantial questions of law framed in this appeal are answered in favor of the assessee and against the revenue. 14. From the foregoing discussions, I hold that the rejection of remission of duty of Rs. 21,52,512/- is unjustified. The impugned order to the extent of rejecting remission of duty of Rs. 21,52,512/- is set aside without disturbing the confirmation of duty of Rs. 59,614/-. The appeal is partly allowed in above terms with consequential reliefs, if any....
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....fication No. 22/2003 C.E., dated 31-3-2003 have been fulfilled and hence the question of demanding the Central Excise duty forgone under the said Notification would not arise. The Commissioner (Appeals) on the contrary has held that the expression 'handling' in the Explanation means usage of goods and extends up to the point when further process on the goods stop. Therefore according to him, even if the goods were 'work in progress', they would be covered by the expression 'during handling' and they would also be hit by the Explanation. They will be considered as having not being used for the intended purpose and duty is rightly demandable. We find that in the fire accident, the imported goods involving Customs duty and indigenous goods involving excise duty were destroyed. The Revenue has no problem in remitting the Customs duty under Section 23 of the Customs Act. As regards the goods indigenously procured, both capital goods and raw materials are involved. On the question that the fire accident occurred in the production premises there is ample evidence and that fact is not under dispute. This clearly indicates that the raw materials have already been issued for the intended p....