R. Jayaraman, Member (T)

1. This is an appeal directed against the Order-in-Original bearing No. Collector/No. 12/1989 [File No. V(Gen) 15- 38/Adj/86/3021] dated 8-2-1989 passed by the Collector of Central Excise & Customs, Aurangabad.

2. Brief facts for the purpose of disposal of this appeal can be stated as below:

3. The appellants are manufacturers of sugar. On 11-1-1986 at about 9.30 a.m. a fire accident took place in their factory effecting godown No. 19 where fully manufactured sugar was stored. On the very same day the appellants have sent telegraphic intimation to the concerned authorities, namely to the Assistant Collector and Collector and apart from giving a letter to the local Supdt. bringing out the fact of fire accident and also requesting for permission to transfer the damaged sugar to another godown. After the investigation, a show cause notice was issued alleging removal under Rule 9(i) of 16959.17 Quintals of white sugar and demanding duty amounting to Rs. 9,73,456.45. The show cause notice was issued by the Supdt. answerable to the Collector. The Collector in the adjudication proceedings, confirmed the demand of duty in respect of the aforesaid amount. The present appeal is against the aforesaid order of the Collector.

4. Shri K.P. Joshi, the learned advocate, appearing on behalf of the appellants, giving the facts of the case in detail pointed out that the intimation in respect of the fire accident was given on the very same day to various authorities. 10 Fire engines were brought and the fire was put out at 6.00 p.m. on the same day. The Village Talayati also came on the same day and drew a Panchnama regarding the fire accident. He took us through the relevant intimations given to the Excise authorities and others. He also pointed out that Surveyor of Insurance for the United India Insurance Co. have also made a detailed survey and recommended for settlement of the claim. In the said survey, a reference is also made to the demand for duty in respect of the sugar destroyed, which claim however has not been settled by the Insurance Co. on the ground that they have to pursue this with the Excise authorities in view of the legal provisions. Shri Joshi also pointed out that in this case a total of 62,648 bags valued at Rs. 2.58 crores was affected by fire accident. Out of this, they could segregate 55,647 Quintals and remove them for reprocessing with due permission of the Supdt. In this context he took us through the letter written to the Supdt. for permission for which reprocessing and the permission granted by the Supdt. After reprocessing, they could retrieve 38,508.83 quintals which were ultimately cleared on payment of duty. The balance of 16,959.17 quintals could not be retrieved since it has been totally destroyed by fire in respect of which only remission was sought for. Shri Joshi also took us through the order of the Collector to point out that the Collector himself has conceded that there is no illicit removal in this case and Rule 9(1) and (2) are not attracted. He has refused to extend the duty remission envisaged under Rule 49 only on the ground that the appellants have not established the unavoidable nature of the claimed fire accident and even the claim of fire and genuineness of the accident has not been established with any tenable evidence. Shri Joshi contended that the copy of the Insurance Survey Report was made available to the Supdt. and in this context, he also referred to the correspondences and the office copy of the letter forwarding the Insurance Survey Report. When he was specifically asked as to whether the documents, namely the Panchnama drawn by the Village Talayati Insurance Survey Report and the correspondences with the Insurance Co. were produced before the Collector in reply to the show cause notice, he contended that since the show cause notice was in terms of Rule 9(1), there reply was sent accordingly without sending them these documents. In any case, he contended that t