2004 (1) TMI 421 - AT - Central Excise

Summary

Issues:
1. Duty demand on goods not exported.
2. Applicability of proviso (c) to Section 35B(1) of Central Excise Act.
3. Allowance of transit and storage loss for goods cleared for export under AR-4.

Analysis:

1. Duty demand on goods not exported:
The case involved the appeal filed by the Revenue against an Order-in-Appeal passed by the Commissioner of Customs & Central Excise, Bangalore. The dispute arose when the Respondents failed to produce proof of export for a substantial quantity of Molasses cleared for export without payment of duty. The Assistant Commissioner issued Show Cause Notices and demanded duty on the Molasses not exported. The Commissioner (Appeals) set aside the Assistant Commissioner's orders and allowed the appeals. The Tribunal found that the condonation of shortage was not justified, as the goods cleared under one AR-4 must be exported as per the B1 bond executed. The Tribunal modified the Order-in-Appeal to set aside the condonation of loss for the quantity of Molasses not exported, emphasizing that such shortage cannot be adjusted with excess from other consignments.

2. Applicability of proviso (c) to Section 35B(1) of Central Excise Act:
The Respondents argued that the appeal should have been filed before the Revisionary Authority as per proviso (c) to Section 35B(1) of the Central Excise Act, as the issue related to goods exported. However, the Tribunal held that the appeal was properly filed before the Tribunal, as the demand of duty was on goods not exported, which is distinct from goods exported outside India. The Tribunal distinguished the case cited by the Respondents, stating that it related to rebate on goods exported and was not applicable to the present situation.

3. Allowance of transit and storage loss for goods cleared for export under AR-4:
The Respondents contended that transit and storage loss should be allowed for goods cleared for export under AR-4 due to natural causes affecting the volatile commodity of Molasses. However, the Tribunal ruled that there is no provision in the law to allow such loss when excisable goods cleared without payment of duty under bond are not exported. The Tribunal emphasized that loss condoned in a previous case was for storage within the factory premises, which was authorized by law. Therefore, the Tribunal rejected the argument for allowing transit and storage loss for goods not exported under AR-4, modifying the Order-in-Appeal to disallow the condonation of loss for the unexported quantity of Molasses.

In conclusion, the Tribunal upheld the appeal by the Revenue, setting aside the condonation of loss for the unexported quantity of Molasses and emphasizing the requirement to export goods as per the B1 bond executed under AR-4. The Tribunal clarified the proper forum for filing the appeal and rejected the allowance of transit and storage loss for goods not exported under AR-4.