TaxTMI 
TaxTMI 
2025 (11) TMI 447
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....r section 28AA. He also imposed penalty of Rs. 1,05,18,265/- under section 114A of the Act and penalty of Rs. 5,00,000/- under section 114AA of the Act and Rs. 25,000/- under section 117 of the Act on the appellant. 2. The facts which led to the issue of the impugned order are that the appellant is a manufacturer of Refined Oil, Vanaspati and Bakery Shortening. To manufacture these, the appellant had, during the relevant period (May 2017), imported Crude Palm Oil. Crude Palm Oil was leviable to Basic Customs Duty [BCD] @ 85%. However, the Notification No. 12/2012- CUS (Sl. No. 51) dated 17.03.2012 exempted the duty in excess of 7.5% subject to the condition that the Crude Palm Oil is used for manufacture of Refined Oil, Refined Palmolien, Vanaspati, Bakery Shortening etc. This exemption was subject to the condition that the importer follows the procedure under the 2016 Rules which include execution of a continuity bond. 3. On 14.05.2017, there was a fire accident in the appellant's factory which was controlled by the Fire Department only by 16.05.2017. On 16.05.2017, the appellant intimated the jurisdictional Central Excise authorities regarding the fire. On 16.05.2017, the a....
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....ized representative for the Revenue and perused the records. Submissions of the appellant :- 10. Learned counsel for the appellant made the following submissions :- (i) Within two days of the fire, the joint survey was conducted by the insurance surveyor and a loss of 214.069 M.T. of Crude Palm Oil was reported. The department was informed on 16.05.2017 ; (ii) Later, realizing that there was a human error in entering the figures, the loss was enhanced 282.921 M.T. ; (iii) In his final report the surveyor assessed the actual loss to be 230.77 M.T. ; (iv) In the impugned order it is held that the appellant had manipulated the records and duty has been demanded on the entire quantity of 282.921 M.T. treating the difference between this figure and the final loss recorded in the surveyor's report of 230.77 M.T. as clandestine removal (282.92 - 230.77 = 52.75 M.T.) of Crude Palmolive Oil ; (v) The appellant's annual consumption of Crude Palm Oil has been around 1,00,000 M.T. on which it has been claiming customs duty exemption around Rs. 400 crores. The allegation that the appellant had clandestinely removed 52.15 M.T. against such huge ....
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.... Rakesh Sharma explained that the difference of 68.85 M.T. was due to the difference in the opening balance of the Crude Palm Oil and that they had come to know about the mistake in June 2017 reconciling the accounts and rectified it. However, the surveyor, in his report dated 13.09.2018, rejected this contention of the appellant and assessed the final loss that 230.77 M.T. (vii) In view of the above the impugned order may be upheld and the appeal may be dismissed. Findings:- 12. We have considered the submissions advanced by the learned counsel for the appellant and learned authorized representative for Revenue and perused the records. 13. The undisputed facts are the appellant had imported Crude Palm Oil for use in manufacture of specified goods and availed the benefit of exemption Notification No. 12/2012-CUS dated 17.03.2012. This exemption was available subject to the condition that the Palm Oil is used to manufacture specified goods after following the 2016 Rules. 14. Due to fire accident, the oil which was cleared claiming the benefit of the exemption was lost. When the fire accident took place, the appellant had reported to the police, to the fire depar....
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....cts and circumstances involved, duty cannot be demanded on the goods which have been destroyed due to unavoidable accident/natural causes on the ground that they have not been used for the intended purpose. It was further held that the raw materials/capital goods which are in the premises of production would not be hit by the Explanation to Rule 6 of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. 6. We are in complete agreement with the view expressed by the Tribunal Explanation to Rule 6 of the Rules is amply clear. In the instant case, there is no dispute that the goods have been destroyed by accidental fire. The view of the Commissioner (Appeals) was that the expression "handling" used in the Explanation means usage of goods and extends up-to the point when further process on the goods stop. Therefore, according to him, the goods would be covered by the expression "during handling" and they would be hit by the Explanation. The view of the Commissioner (Appeals) that even the 'work-in-progress' material would be covered by the Explanation to Rule 6 is incorrect. 7. The Tribunal has rightly passe....