Aditi Foams Pvt. Ltd. Vs. Cce - Court Judgment

Excerpt:
2. appellants are engaged in the manufacture of flexible foam sheets and were availing benefit of the modvat credit. on 13.6.1998 fire accident took place in the factory particularly in the production department. on account of the fire, certain inputs as well as final products were destroyed. the appellants filed an application for remission of duty which was rejected by the commissioner of central excise earlier vide the impugned order.3. the application was rejected on the ground that the appellants sent an intimation regarding fire accident late an fire took place due to short circuit and the same cannot be construed as natural cause for loss.4. the contention of the appellants is that the appellants informed the revenue through telegram on the date when the incident of fire took place and the same was received by the divisional office on 15.6.98.this fact was not denied by the revenue. as the appellants had informed the revenue in respect of the fire accident in the factory on the same date, therefore, it cannot be said that they had informed the revenue late. appellant also relied upon the decision of the tribunal reported in 1998 (100) elt-358.5. we find that as appellant sent the telegram on that date of accident which was received by revenue, hence the rejection of the claim on the ground that appellant informed the revenue late is not sustainable.6. the other issue involved in this appeal is whether this loss of goods by fire can be construed as natural cause for loss or caused by unavoidable accident. tribunal in the case of quest international india ltd. v. cce, mumbai, reported in 1998 (100) elt-358 held that to prove loss due to preventable accident, there must be some evidence and in the absence of evidence, if cannot be said that loss was due to preventable accident. tribunal allowed the appeal where the goods were destroyed in fire by unavoidable accident. the ratio of the above decision is fully applicable to the facts of present case.7. in view of the above decision of the tribunal, the impugned order is not sustainable, hence set aside. the appeal is allowed.

Judgment:
2. Appellants are engaged in the manufacture of flexible foam sheets and were availing benefit of the modvat credit. On 13.6.1998 fire accident took place in the factory particularly in the production department. On account of the fire, certain inputs as well as final products were destroyed. The appellants filed an application for remission of duty which was rejected by the Commissioner of Central Excise earlier vide the impugned order.

3. The application was rejected on the ground that the appellants sent an intimation regarding fire accident late an fire took place due to short circuit and the same cannot be construed as natural cause for loss.

4. The contention of the appellants is that the appellants informed the Revenue through telegram on the date when the incident of fire took place and the same was received by the divisional office on 15.6.98.

This fact was not denied by the Revenue. As the appellants had informed the Revenue in respect of the fire accident in the factory on the same date, therefore, it cannot be said that they had informed the revenue late. Appellant also relied upon the decision of the Tribunal reported in 1998 (100) ELT-358.

5. We find that as appellant sent the telegram on that date of accident which was received by revenue, hence the rejection of the claim on the ground that appellant informed the revenue late is not sustainable.

6. The other issue involved in this appeal is whether this loss of goods by fire can be construed as natural cause for loss or caused by unavoidable accident. Tribunal in the case of Quest International India Ltd. v. CCE, Mumbai, reported in 1998 (100) ELT-358 held that to prove loss due to preventable accident, there must be some evidence and in the absence of evidence, if cannot be said that loss was due to preventable accident. Tribunal allowed the appeal where the goods were destroyed in fire by unavoidable accident. The ratio of the above decision is fully applicable to the facts of Present Case.

7. In view of the above decision of the Tribunal, the impugned order is not sustainable, hence set aside. The appeal is allowed.