2008 (5) TMI 591 - AT - Central Excise

Summary

Issues:
- Appeal against rejection of remission of duty for shortage in molasses storage.
- Contention regarding proper procedure for remission request.
- Variation in stock quantity and Board's Circular allowing 2% variation.

Analysis:
1. Appeal against rejection of remission: The appellant, engaged in sugar and molasses manufacture, appealed the Commissioner's decision rejecting remission of duty for a shortage of 93.824 MTs in stored molasses. The rejection was based on the appellant's alleged failure to follow proper procedure for remission request.

2. Proper procedure contention: The appellant argued that they informed the Revenue of the shortage and subsequently filed a formal remission application, contending they had followed the necessary procedure. The Assistant Commissioner issued a show-cause notice for duty demand, which was confirmed by the adjudicating authority and the appeal dismissed by the Commissioner (Appeals). However, the Government of India, in a revision application, set aside the demand citing a Board circular allowing a 2% variation in molasses quantity, whereas the actual variation was only 0.37%.

3. Variation in stock quantity and Circular: The Revenue contended that the remission request was rightly rejected due to non-compliance with procedure and failure to prove the cause of the molasses loss. However, the Tribunal found that the revisionary authority had already set aside the demand based on the minimal 0.37% variation, well within the 2% allowed by the Board's Circular No. 261/15/1982-CX.8. Consequently, the impugned order was set aside, and the appeal allowed.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the rejection of remission of duty for the shortage in stored molasses based on the permissible variation in stock quantity outlined in the Board's Circular and the revisionary authority's decision.