Fire Incidence Beyond Control Of ONGC Petro, CESTAT Allows Customs Duty Remission

The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed the customs duty remission on the goods that were destroyed as a result of the fire incident beyond the control of the assessee, ONGC Petro.

The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) observed that the fire incident had taken place in the appellant's factory located in SEZ units. As per the survey report, it is clear that there is no negligence on the part of the appellant, as the fire broke out suddenly beyond the control of the appellant. Therefore, the allegation that the appellant has not taken the proper precautions to avoid a fire incident is absolutely baseless and imaginary. Moreover, it is the appellant who has to be most careful about their goods, as it is not only their duty but also a huge stake in their value.

The appellant has challenged the order issued by the Commissioner and rejected the application for remission of duty in respect of imported raw materials destroyed in a fire in the appellant's SEZ unit.

The appellant contended that Section 23 of the Customs Act is clearly applicable in the present case for the reason that, with regard to the overriding effect of the SEZ Act, it only applies to the provisions of other acts that are not consistent with the provisions of other acts. The appellant has sought remission of customs duty. As regards the levy of customs duty, the Customs Act is applicable. Therefore, for remission of duty, the provision for remission provided under Section 23 shall also apply, which is not inconsistent with the provisions of the SEZ Act.

The appellant submitted that there was no negligence on the part of the appellant as the fire broke out suddenly beyond the control of the appellant. Therefore, the allegation that the appellant has not taken the proper precautions to avoid a fire incident is absolutely baseless and imaginary.

The tribunal held that the appellant has made out a very strong case of remission of customs duty in respect of the destroyed goods in the fire.

Counsel For Appellant: Sujit Ghose

Counsel For Respondent: Rajesh Nathan

Case Title: ONGC Petro Additions Limited Versus C.C.-Ahmedabad

Case No.: Final Order No. 12735/2023

Click Here To Read The Order