Assessee is eligible for remission of duty in respect of goods cleared for export under bond but which were destroyed at port before same could be exported
Honest Bio-Vet Pvt. Ltd. Vs Commissioner of Central Excise, Ahmedabad-I [2014-TIOL-2286-CESTAT-AHM-LB]
Honest Bio-Vet Pvt. Ltd. (the Appellant) cleared certain goods for export under ARE-1 under bond without payment of duty. The Appellant had taken the goods directly to the port of export i.e. JNCH, presented the Shipping Bill and ‘Let Export’ Order was allowed. However, the goods could not be loaded on the ship for export due to Fire Accident at the port. The goods were badly damaged and were brought back to the factory with the permission of the Customs Officers at JNCH. The Appellant informed the same to the Jurisdictional Central Excise Officers who thereafter along with Inspector visited the factory of the Appellant and verified the condition of the damaged goods.Insurance claim in respect of the same was also settled by the Insurance Company, excluding the Central Excise duty element.
Thereafter, the Appellant filed a claim for remission of duty under Rule 21 of the Central Excise Rules, 2002 (“the Excise Rules”) on August 15, 2008 which was rejected by the Department on the ground that destroyed finished goods had been removed from factory premises for export, thereby primary condition of eligibility for remission of duty on destroyed goods is not fulfilled as required under Rule 21 of the Excise Rules.
On appeal being filed to the Hon’ble CESTAT, Ahmedabad, theHon’ble Single Member Bench heard the appeal and after observing that there were two streams of view in the stated matter, referred the matter to the Hon’ble President for consideration by the Larger Bench.
The Larger Bench of the Hon’ble Tribunal decided the matter in favour of the Appellant and held as under:
This would be the fair interpretation of Rule 21 of the Excise Rules. Thus, primary condition of eligibility of remission of duty on the destroyed goods stands fulfilled.
Hence, the Appellant was held to be eligible for remission of duty on the goods destroyed at port of export in terms of Rule 21 of the Excise Rules.