- (1.) By mean of the present appeal filed under Section 35-G of the Central Excise Act, 1994, Commissioner of Central Excise is challenging the order dated 3-12-2004 passed by Custom, Excise & Service Tax Appellate Tribunal in appeal no. E/S/2839/04 and E/4331/04. It appears that 2181 qntls. of BISS sugar, which were in the stock of the respondent sugar mill was destroyed in fire on 26-6-2001. This sugar was of the crushing season 2000- 01. The claim made by the respondent sugar mill from the insurance company was not entertained on the ground that as fire was due to spontaneous combustion, which was not covered under the Insurance Policy no. 1142170201829 issued by it. Commissioner of Central Excise disallowed the request for remission of duty amounting to Rs. 1,14,761/- on the ground that party would have taken preventive measures to safeguard their product and clearances were made in time, such loss could not have been occurred and a demand of Rs. 1,85,385/- towards central excise duty and Rs. 1,85,385/- towards penalty was raised. Feeling aggrieved the respondent sugar mill preferred an appeal before the Tribunal. Tribunal by the impugned order has allowed the appeal. It has held that in process sugar was destroyed due to spontaneous combustion (natural cause) and therefore, demand of duty is not justified at all.
(2.) We have heard Sri A.K. Roy, learned counsel appearing for the Revenue and have perused the impugned order passed by Commissioner of Central Excise as also by the Tribunal.
(3.) Under Rule 49(1) of the Central Excise Rules, 1944 a person is not liable to pay the duty leviable of any goods, if it is shown to satisfaction of the proper officer that the goods have been lost or destroyed by natural cause or by unavoidable accident during handling or storage in such storage room or other approved premises. For ready reference Rules 49 reads as follows : "Rule 49. Duty chargeable only on removal of the goods from the factory premises or from an approved place of storage :- (1) payment of duty shall not be required in r/o excisable goods made in a factory until they are about to be issued out of the place or premises specified under Rule 9 or are about to be removed from the store room or other place of storage approved by the commissioner under Rule 45 provided that the manufacturer shall on demand pay the duty leviable on any goods which are not accounted for in the manner specifically provided in this Rules or which are not shown to the satisfaction of the proper officer to have been lost or destroyed by natural causes or by unavoidable accident during handling or storage in such storage room or other approved premises. Provided further that proper officer may not demand duty due on any goods claimed by the manufacturer as unfit for consumption are for marketing subject to such conditions as may be imposed by the commissioner by order in writing.";