2005 (10) TMI 338 - AT - Central Excise

Summary

Issues:
Appeal admission based on threshold limit under Section 35-B (1) - Loss of molasses due to storage losses - Jurisdiction for seeking remission of duty - Proper procedure for remission application - Permissible limit of storage losses - Miscommunication by revenue authorities - Setting aside the order of Commissioner (Appeals) - Remission of duty on storage losses - Principles of natural justice in deciding the matter afresh.

Analysis:
The appeal was listed for admission as the amount involved was below the prescribed threshold limit under the second proviso to Section 35-B (1). The issue revolved around the loss of molasses due to storage losses in the factory, with the appellant seeking remission of duty. The advocate pointed out that the loss was due to natural causes and fell within the permissible limit according to the Board's Circular. However, there was a procedural error as the remission application should have been addressed to the Commissioner, Central Excise, instead of the Asstt. Commissioner/Deputy Commissioner.

The learned DR argued that the appellant should have followed the correct procedure by approaching the Commissioner for remission of duty on storage losses. Despite the miscommunication and procedural errors, the Tribunal considered the submissions from both sides and decided to dispose of the final appeal after granting a stay. The Tribunal acknowledged the peculiar nature of molasses leading to storage losses and the permissible limit set by the Board.

The Tribunal found that the quantity of losses in this case was within the permissible limit, and the appellant had applied for condonation of losses as per the correct procedure. However, the Deputy Commissioner's Officer issued a show cause notice demanding duty instead of guiding the appellant correctly. The Tribunal emphasized the importance of proper communication and directing the appellant to the appropriate authority for remission applications.

Based on the discussion and the permissible limit of storage losses, the Tribunal set aside the order of the Commissioner (Appeals). The issue of remission of duty on storage losses was remanded back to the original adjudicating authority to decide afresh, ensuring the principles of natural justice were followed. The Tribunal directed the adjudicating authority to forward the remission application to the proper higher authority for a decision and consider it during the remand process.