ADITYA INDUSTRIES Vs. COMMISSIONER OF C. EX., AHMEDABAD

JUDGEMENT

(1.) THE dispute in the present appeal relates to the remission of duty in respect of raw material, which was destroyed in the factory premises of the appellant on account of post Godhra Carnage Development. It is seen from the impugned passed by Commissioner (Appeals) that the said fact regarding destruction of goods in fire is not under dispute. The remission application stand denied on the ground that the said raw material were received by the appellant without payment of duty against CT -3 certificate and the same has not been utilized in the manufacture of final product, which was required to be exported and as such, the condition of Notification No. 1/95 -C.E, dt. 4 -1 -95 is not satisfied and as such, noticee has rendered themselves liable to payment of duty and interest. For rejecting the above request of the appellant, Commissioner (Appeals) has observed as under :

(2.) ACCORDINGLY , he has confirmed the demand of duty of Rs. 68,86,612/ - along with confirmation of interest.

(3.) AFTER hearing both sides, we find that the issue is no more res integra and in case of M/s. Sami Lab Ltd. v. CC, Bangalore - 2007 (216) E.L.T. 59 (Tri. -Bang.), it was observed as under : 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 purpose. Therefore, the materials lost in fire accident were in the form of work in progress. The Revenues contention and the Commissioner (Appeals)s views that even the work in progress material would be covered by the Explanation to Rule 6 is not correct. Further, we would like to point out that according to Rule 21 of the CER, there is a provision for remission of duty in respect of the goods lost or destroyed by natural causes for unavoidable accidents. Even under Section 23 of the Customs Act, there is a provision of remission of Customs duty on goods lost or destroyed before their clearance. Therefore, it does not stand to reason that the duty on indigenously procured duty free raw materials should be demanded when they are destroyed due to unavoidable accident/natural causes on the specious ground that they have not been used for the intended purpose. We find that the order of the original authority is well reasoned. Therefore, we hold that the raw materials/capital goods which are in the premises of production would not be hit by the Explanation to Rule 6. The above goods have actually been used for the intended purpose. The accident is not the making of the appellant and it should be considered to be an Act of God. Hence, it is not correct to demand the duty forgo. We allow the appeal with consequential relief.