Ramesh Nair DECISION
Ramesh Nair, Member (J)
1. The appeal is directed against the order in original whereby the learned Commissioner rejected the application for remission of duty in respect of the goods destroyed in fire.
2. The appellant sought the remission of duty amounting to Rs. 22,28,876/-. A show cause notice proposed the rejection of application for remission on the ground that the appellant have claimed excise duty as insurance claim from the insurance company.
3. Shri Vinay Kansara learned counsel appearing on behalf of the appellant submits that the limited issue as per the show cause notice was to be decided that whether the remission of duty can be rejected on the ground that the appellant have claimed from insurance not only value of the goods but also the excise duty on the final product for which the remission was claimed. He submits that though the appellant have claimed the excise duty of Rs. 22,28,876/- but the insurance company has reduced the claim and granted the insurance claim including the duty of raw material contained in the finished goods. Therefore, it is not correct to say that the appellant have taken the insurance claim in respect of the excise duty on the final product. He submits that the adjudicating authority in the order in original also decided the remission application against the assessee on the ground that the fire incident was avoidable and appellant have not taken the proper precaution. In this regard, he submits that that since this is not the charge in the show cause notice, the order is beyond the scope of show cause notice which cannot be permitted. He placed reliance on the following judgements:
• CCE vs. Huhtamaki Zinc Ltd. 2021 (50) GSTL 309 (Tri. Amd.)
• UOI vs. Hindustan Zinc Ltd. MANU/RH/0667/2007 : 2009 (233) ELT 61 (Raj.)
• CCE vs. M Kumar Udyog P. Ltd. MANU/UP/1298/2014 : 2014 (306) ELT 19 (All)
• Raltronics (I) P. Ltd. MANU/UP/2846/2017 : 2017 (354) ELT 324 (All)
• Sanskriti Packaging MANU/CS/0336/2014 : 2015 (318) ELT 451 (Tri. Amd.)
• M Kumar Udyog P. Ltd. MANU/CE/0482/2013 : 2014 (302) ELT 385 (T)
• Themis Medicare Ltd. MANU/CS/0071/2014 : 2014 (303) ELT 141 (T)
• Jindal Vijaynagar Steel Ltd. 2006 (201) ELT 18 (T)
4. Shri Kalpesh P. Shah, learned authorized representative appearing on behalf of the Revenue reiterates the findings of the impugned order.
5. I have carefully considered the submission made by both the sides and perused the records.
6. I find that the show cause notice was issued exclusively on the allegation that the remission application is liable to be rejected because the appellant have claimed the excise duty from the total duty on finished goods but the insurance company has reduced the excise duty from the total duty of finished goods to the actual duty of raw material. In this fact, it is not correct to say that the appellant have been given the claim of excise duty on the final product. It is clear from the record that the insurance company has finalised the insurance claim only for the value of the goods and the excise duty suffered on the inputs contained in finished goods. Therefore, the entire allegation that the appellant have claimed the excise duty from the insurance company does not exist. As regard, the other ground for rejection of remission application that the appellant has not taken the precaution to avoid the fire incident, I find that this is not the allegation in the show cause notice, therefore, the adjudication authority is not competent to enter into the grounds which is not flowing from show cause notice. It is settled law that adjudicating authority cannot travel beyond the charges levelled in the show cause notice, therefore, any ground for rejection taken which is not flowing from the show cause notice, the order is not sustainable. Accordingly, I set aside the impugned order and allow the appeal.
(Pronounced in the open court on 19.10.2022)
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