Per C.N.B. Nair :

The appeal is directed against order-in-original No. MP (287/94) 1401 -1996 dated 27.5.96 passed by the Commissioner of Customs and Central Excise, Allahabad. Under the said order the Commissioner rejected the application of the appellant for remission of Central Excise duty of about Rs. 95,000/- and confirmed duty demand of the same amount. He also imposed a penalty of Rs. 50,000/- on the appellant under Rule 173Q of Central Excise Rules, 1944.

Brief facts of the case leading to the above order are that the appellant is a manufacturer of plastic products like HDPE woven sacks and HDPE fabrics. On 13.12.89 a fire broke out in the appellant's premises and destroyed the stock of manufactured goods. The duty involved on such goods was about Rs. 95,000/- on 15.12.89 the appellant informed the Jurisdictional Central Excise authorities about the fire accident. Subsequently, on 5.4.90 the appellant filed an application before the-Jurisdictional Supdt. for remission of duty under Rule 49 of the Central Excise Rules. Some more correspondence took place including with the Collector of Central Excise. Show cause notice dt. 4.10.94 was issued proposing to reject the application for remission of duty and also proposing to demand duty in respect of the goods alleged to be lost in fire. The appellant filed his defence but the same was not accepted and the impugned order was passed.

2. The appellant's contention is that the goods were lost in the fire accident, they were rightly entitled to remission of duty and there is no basis for demanding duty as though the goods had been cleared without payment of duty. During hearing of the case the learned Counsel for the appellant submitted that the fire accident remains confirmed by the report filed with the Police, the payment of insurance claim by the insurance authorities etc. He also submitted there was no evidence or material at all to suggest that the goods had not been destroyed in the fire accident but had been clandestinely cleared without payment of duty. As against this, the Id. DR reiterated the findings contained in the adjudication order.

3. The reason for demanding duty as brought out in para 3(d) of the show cause notice is as under :-

"(d) The most issue that "whether excisable goods on which remission of duty have been claimed were infact lost or destroyed in fire" has not been proved by the party either in their remission application or, in the documents annexed therewith and on the contrary the charge of clandestine removal of the excisable goods by the party in the garb of fire accident comes into existance in view of the letter reference No. 451500/AR/K W/94 dated 3.2.94 of the Divisional Manager, National Insurance Company Ltd. Division-lV (Code 451500), Jeevan Bhawan Building, Hazratganj, Lucknow addressed to the Superintendent of Central Excise Range, Chowk, Lucknow. Wherein even the "Survey Report" of the Insurance Co. have not been provided to the jurisdictional Central Excise authorities on the apparently false pretext of its being "Private and confidential document" (copy enclosed)".

4. The allegation in the aforesaid para has been upheld in the impugned order. The relevant findings as contained in para 5 of the order are as under :-

"The first question before me for decision is whether the excisable goods were actually destroyed in fire accident or not? I have carefully gone through the documents submitted by the party viz. (i) photocopy of F.I. R. lodged with the Police (ii) Photocopy of insurance claim filed with appropriate authority & (iii) Final report of Fire Brigade Deptt. & reports of investigations conducted in the matter which reveal that there is no tenable evidence produced by party to prove that the excisable goods, on which remission of duty was claimed by them, were actually destroyed in fire accident. Further the party has received Rs. 6,22,883.00 only as compensation as against their insurance claim for Rs. 20,71,768.00, which does not s