2003 (2) TMI 264 - AT - Central Excise

Summary

Issues:
1. Application for remission of duty on shortage of molasses.
2. Waiver of right to be heard by the appellants.
3. Shortage of molasses in the steel tank.
4. Claim of shortage being storage loss.
5. Interpretation of Board's Circular on condonation of storage loss.
6. Differentiation between storage loss and handling loss of molasses.

Analysis:

1. The case revolves around the appellants, who are sugar manufacturers, filing an application for remission of duty amounting to Rs. 9,935/- due to a shortage of 19.87 MT of molasses found in their steel tank. The Commissioner of Central Excise rejected the application, leading to the present appeal.

2. The appellants did not have representation during the proceedings, indicating their waiver of the right to be heard, and opted for the case to be decided based on its merits.

3. It is established that there was indeed a shortage of 19.87 MTs of molasses in the appellant's steel tank. The duty payable on this quantity was Rs. 9,935/-. The appellants reported the shortage to the Central Excise Range Superintendent, citing reasons such as differences in weighing scales/bridges and wastage during loading.

4. The appellants claimed the shortage to be a storage loss, citing a Board's Circular permitting condonation of storage loss of molasses to the extent of 2% of the total production. However, the Commissioner rejected the remission application, stating that the shortage was not a storage loss but a handling loss, which was not covered by the Circular.

5. Upon careful examination of the facts and the Board's Circular, it was determined that the shortage did not arise from a storage loss as claimed by the appellants. The Circular did not encompass handling losses of molasses, which required separate evidence and explanation for remission of duty.

6. The judgment upheld the Commissioner's decision to reject the remission application due to lack of evidence supporting handling loss of molasses. The appeal was dismissed based on the findings that the shortage did not qualify as a storage loss as per the Circular, and no interference with the Commissioner's order was warranted.