Order date – 11 April 2023

Parties – PGP GLASS P LTD. Vs C.C. E. & S.T. – SURAT-II

Facts –

• The appellant, PGP GLASS P LTD., in its factory at Kosamba, had stored stock of finished goods in approved bonded store room as well as temporary godown. The entire stock was entered in RG-1 register. 
• A fire broke out on 02.01.1998 and immediately intimation was sent to the Superintendent of Central Excise on the same date and panchanama was drawn on 06.01.98. The Appellant made application for remission of duty under Rule 49 and also debited the cenvat credit of Rs. 5,97,062/- contained in inputs used in the manufacture of final products that were destroyed due to the fire, as per the directions of the Superintendent of Central Excise 
• However, the appellant was issued a show-cause notice and demand is confirmed on finished goods lost in the fire.
• Aggrieved by the order, present appeal is filed. 

Issue –

• Whether remission of duty under Rule 49 of Central Excise Rules, 1944, in respect of goods destroyed due to fire accident, is admissible to the appellant or not?

Order –

• The Court analyzed the rule and found that duty shall not be demanded where excisable goods have been destroyed or lost by natural causes or unavoidable accidents and the proper officer is satisfied about the same.
• The Court found that the loss of the excisable goods was due to an unavoidable accident, and the manufacturer shall, on demand, pay duty leviable on any goods which are not shown to the satisfaction of the proper officer to have been lost or destroyed by natural causes or unavoidable accidents during handling or storage.
• Therefore, the Court was of the view that the accident which caused the loss of the excisable goods to the appellant was unavoidable, and the remission of duty is admissible. 
• Hence the impugned order is set aside. The appeal is allowed with consequential relief, as per law.