ORDER
Gowri Shankar, Member (T)
1. Appellant was a manufacturer of perfumery compounds, aromatic chemicals, flavouring essences and similar goods. Following the outbreak of a fire in its factory on 29-9-1980, which destroyed all records of finished goods and raw material, it claimed remission of duty. Notice issued to the assessee proposed to deny remission of duty on the ground that the remission claimed of Rs. 2.40 lakhs which was calculated on the value of finished goods of Rs. 30 lakhs calculated on the basis of daily clearances in the past was excessive. The assessee replied to the notice stating that, since the goods which were destroyed had been consumed in the fire, it had based the claim for insurance on the value of finished goods which were in stock on 31st March, 1982 and 30th June, 1982 the last days of its full quantum preceding the price. In arriving at the duty payable it had added to this figure the items which would be includible in addition to the value of finished goods, in the assessable value these being selling and administration expenses and profit. The Collector did not accept these contentions. In fact he did not even accept that the fire was caused by accident. He said that the fire was caused by “heated resinoids overflowing the vessel in the absence of the supervisor whose job was to stir them to attend to them when it was being heated.” He concluded that there was a clear case of negligence. He further noted that the Superintendent of Central Excise had given as the cause of the fire not overflowing of heated resinoid but leakage of ethylacetate which burst into flames on contact with a gas burner. He concluded that the fire was clearly a result of negligence. He therefore ordered the assessee to deposit Rs. 2.40 lakhs which was the duty payable on the goods.
2. The notice issued to the appellant did not propose to deny the remission on the ground that the fire was not an unavoidable accident. It proceeded on the assumption that remission was in principle due. It only called into question the quantification of the duty of which remission was claimed. Therefore the Collector’s order denying the remission on the ground that the fire was unavoidable has gone beyond the notice. The appellant was never given an opportunity to answer on the issue.
3. Finally the Collector seems unsure as to the cause of the accident. While he mentions in one paragraph that it was an accident which could have been avoided, he says that it was caused by overflowing of the heated resinoids. He says in the next paragraph that the Superintendent has said that the fire was due to leakage of ethylacetate and its consequent bursting into flames. The fire brigade has indicated as the supposed cause of the fire the bursting into flames of ethylacetate. The police report indicates that the fire started in the packing department on the first floor and does not give any specific cause. It however says that the fire was accidental and that inquiries into the matter were closed. It is evident from the appellant’s reply to the notice that the insurance company had settled its claim for the goods destroyed in the fire. The Collector seems to have gone by what he says he was told at the hearing. There is no reference to overflowing of heated resinoids in any of the documents which have so far been discussed. The Collector’s view that leakage of ethylacetate if that was the cause of the fire was also preventable is not supported by any material. He has not cited any material on which he has based his conclusions. There would have to be specific evidence on record before it can be said that the fire was not caused by unavoidable accident. The claim that the fire was caused by unavoidable accident has therefore to be accepted. The appellant could claim benefit of remission of the goods destroyed in the fire.
4. In the order impugned in the appeal, the Collector has implicitly accepted the figure of remission claimed by the assessee, while denying the claim for remission he asked the assessee to deposit Rs. 2.40 lakhs. He has in other words not accepted as covered the extent of the remission claimed by the assessee. It would not be necessary, except for purely academic purposes to determine the duty payable on the goods burnt in the fire. Such determination would be required in cases where part of the goods were destroyed, or the goods damaged. In a case of this kind, where complete stock has been burnt, once it is held that no duty is payable on them by application of the first proviso to Sub-rule (1) of Rule 49, no further action is necessary. In view of this, the appeal succeeds on the point that it was caused by unavoidable accident.
5. Appeal allowed. Impugned order set aside.