KUNTAL GRANITES LTD. Vs. COMMISSIONER OF C. EX., BANGALORE

JUDGEMENT

(1.) BOTH these appeals raises common question of law and facts pertaining to the same assessee and hence they are taken up together for disposal as per law. By O -I -O No. 1/05, dated 21 -4 -05, the Commissioner has rejected the application filed by the appellant seeking revision of Central Excise duty under Rule 21 with regard to the goods dispatched to the lorry which met with an accident resulting in spillage of 51 pieces of granite slabs meant for export leading it its destruction. As a result of this rejection, the revenue has confirmed the demand of duty by Order -in -Appeal No. 5/06, dated 10 -1 -06 on the ground that assessee is required to discharge duty on the quantity of polished granite slabs which were destroyed in the accident as their prayer for remission of duty has been rejected by the Commissioner. The appellants contention is that in terms of Rule 21 of C.E. Rules they are entitled to claim remission if the goods were destroyed due to unavoidable accident at any time before removal of the goods. It is the submission of the assessee that the place of removal has been defined under Section 4(3)(c) of the Central Excise Act 1944 which is as under : - a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory. In this connection learned Counsel draws our attention to the provisions in Central Sales Tax Act. He refers to Section 5 of the Act which is noted herein below : - When is a sale or purchase of goods said to take place in the course of import or export. - (1) A sale or purchase of goods shall be deemed to take place in the course of export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the Customs frontiers of India. He points out that in respect of export goods, place of removal will be only when the documents are presented to the Customs Officers for export. The finding given by the authorities that the place of removal is factory is not correct in respect of export goods as the sale comes into effect only when the documents of title to the goods are presented at the Customs office in the form of presentation of shipping bills. He submits that when clearances are made under bond, are deemed to be under overall customs control. This has been so held by the Tribunal in the case of Sangita Printers & Exporters v. CCE, Allahabad [1994 (73) E.L.T. 182 (T)]. He also submits that the Apex Court in the case of M.J. Exports Ltd. v. CEGAT [1992 (60) E.L.T. 161 (S.C.)] has explained the expression, for home consumption vis -a -vis expression warehousing. He also refers to the ruling rendered by this Bench in the case of Koeleman India Pvt. Ltd. v. CC, Bangalore [2005 (192) E.L.T. 866 (T -Bang.)] which has clearly held that when the goods are damaged during transportation from factory to the port of export, and due to reasons beyond the control of appellants then, it has to be held that there is no diversion for home consumption and demands were set aside. He points out to another ruling of the Mumbai Bench in the case Associated Capsules Pvt. Ltd. v. CCE, Pune [2007 (207) E.L.T. 613 (Tribunal) = 2006 -TIOL -1497 -CESTAT -Mum] on the same point which is in his favour. He submits that the Revenues reliance on the Northern Bench reliance in the case of Ginni Filaments Ltd. v. CCE, Lucknow [2005 (188) E.L.T. 45 (Tri -Del.)] is sub silentio to the provisions of Rule 4(3). However, Section 4(3)(c) of the C.E. Act defines the place of removal to be read with Section 5 of the Central Excise Act. Therefore the Single Member Bench ruling in the case of Ginni Filaments has no bearing in the matter.

(2.) LEARNED DR relies on the Single Member Bench ruling rendered in the case of Ginni Filaments Ltd.

(3.) WE have considered the submissions and agree with learned Counsel on the legal point. The SMB in the case of Ginni Filaments has not examined the provisions of Section 4(3)(12) of Central Excise Act read with Rule 21 of Central Excise Rules and Section 5 of the Central Excise Act. When the goods are removed from the factory for export purposes and the goods are destroyed due to unavoidable reasons, accident caused to the lorry, then in such a circumstances the goods are not deemed to have been removed from the factory gate in terms of Section 5 of the Central Sales Tax Act as sale has not been completed. Section 4(3)(c) of C.E. Act clearly explains that the place of removal is the premises from where excisable goods are to be sold after their clearance from the factory. In the present case, the goods were exported and when export documents are presented to the Customs office, then that is the place of removal as per Section 5 of C.E. Act. The same finding has been rendered by this bench in the case of Koeleman India Pvt. Ltd. v. CC, Bangalore [2005 (192) E.L.T. 866 (T -Bang.)]. There is no reason to take a different view from the same. The finding recorded by SMB in Ginni Filaments Ltd., is sub silentio without due consideration to the provisions of law. Hence Both the orders are set aside by allowing the appeal with consequential relief if any.