CCE Vs. INDORE SANDAL OIL MILLS

JUDGEMENT

(1.) THIS appeal is directed against order in appeal dated 20th August 2004 vide which the learned Commissioner (Appeals) set aside the order in original which confirmed the demand of the duty and also imposed penalty.

(2.) THE relevant fact that arise for consideration are the factory of the respondent was visited by the officers on 10/02/98 and on checking of the records, officers found entry in RG 1 register on 16/08/97 indicating stock as nil while on the earlier date i.e. on 15/08/97 i.e. the stock was indicated as 99.50 kgs. of sandal oil. It was intimated to the officers that there was a theft in the factory of the appellant on 15/08/97 and this stock was stolen by the dacoits, who were armed with fire arms. It was also informed by the respondent this incident was intimated to the police officers as well as to the collector of Central Excise, Indore - 1 vide letter dated 17/08/97. The Assistant Commissioner of Central Excise issued a show cause notice proposing to demand duty on such sandal oil which was not found in the factory and also for imposition of penalty. The adjudicating authority confirmed the demand on the respondent and imposed penalties. On an appeal, Commissioner (Appeal) set aside the order in original on the ground that the theft is unavoidable accident. Hence this appeal.

(3.) LEARNED SDR submits that the issue involved in this case is not at all a case of remission. It is submitted that the demand was under 9(2) of Central Excise Rules, while the Commissioner has set aside the Order in original on the ground that the Rule 49 will be applicable in this case. It is further submitted that the theft cannot be considered as unavoidable accident. Learned advocate appearing on behalf of the respondent submits that the theft is unavoidable incident, as has been accepted and laid down by the various judicial forums. He relies upon the judgment of Calcutta High Court in the case of Bavaji and Motibhai v. Inspector of Central Excise and Ors. as reported at 1979 E.L.T. (J 282). It was his submission that the Commissioner (Appeal) has correctly come to the conclusion, based on the fact that the respondent had intimated the authorities regarding the theft within one day. Considered the submissions made by both sides and perused records. I find that the show cause notice issued to the respondent demands, the duty on the following allegations: Now therefore, Notices M/s Indore Sandal Oils are hereby called upon to show cause to Assistant Commissioner, Central Excise, Division I, Indore within 30 days of the receipt of the Noticee, as to why: