Relief to Bajaj Herbals: CESTAT grants remission of Duty on Finished Goods destroyed in Fire Incident [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench granted remission of duty on finished goods destroyed in fire incident, thereby granting relief to Bajaj Herbals.

The appellant, Bajaj Herbals Pvt Ltd is engaged in the manufacture of the excisable goods namely, hair oil, hair cream, hair dye powder, tooth paste, hand wash liquid, beauty fairness cream, petroleum jelly, hair conditioner/ shampoo, talcum powder etc. falling under chapter 33 of the First Schedule of Central Excise Tariff Act, 1985. The appellant was also availing the facility of cenvat credit of duty paid on the inputs and capital goods under Cenvat Credit Rules, 2004.

The appellant filed application for remission of excise duty amounting to Rs. 22,71,034 under Rule 21 of the Central Excise Rules, 2002 on finished goods claiming that their finished goods were destroyed in the fire accident on 30.04.2012 as per the detailed annexure-A annexed to the show cause notice.

With reference to their remission application a show cause notice was issued wherein it was alleged that the appellant did not take adequate steps and precaution in storing their finished goods as it is established that the fire accident has taken place as result of negligence which can’t be considered as natural cause or unavoidable accident in order to grant remission of duty of Excise and it was also alleged that the appellant before filing the remission application have not reversed the cenvat credit of duty involved in the raw material used in the manufacture of finished goods so destroyed.

The adjudicating authority rejected the remission claim confirming the charges made in the show cause notice. Aggrieved the present appeal has been preferred.

A Single Bench consisting of Ramesh Nair, Judicial Member observed that “As per my above discussion and findings, I find that the appellant’s case is clearly covered under the four corners of Rule 21 of Central Excise Rules, 2002 and the appellant is clearly eligible for remission of duty on the finished goods destroyed in fire incident.”

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