1984 (9) TMI 281 - AT - Central Excise

Summary

Issues:
1. Appeal against demand for Central Excise duty on lost molasses due to unavoidable accident.
2. Interpretation of Central Excise Rules regarding remission of duty on lost or destroyed goods.
3. Discrepancy in show cause notice and arguments presented by both parties.

Analysis:
1. The case involved an appeal by the Collector of Central Excise, Patna against an order passed by the Collector (Appeals), Central Excise, Calcutta, regarding a demand for duty on lost molasses. The respondent contended that the loss of molasses amounting to Rs. 25,398.45 was due to an unavoidable accident, as reported to the authorities promptly. The Revenue, however, confirmed the demand under Rule 9(2) of the Central Excise Rules, 1944. The Collector (Appeals) accepted the respondent's appeal, leading to the Revenue's appeal before the Appellate Tribunal CEGAT CALCUTTA.

2. The appellant argued that the molasses had to be destroyed under Rule 47 and Rule 49, alleging defiance by the respondent. On the other hand, the respondent's consultant contended that there was no contravention of Rule 47, emphasizing the accident beyond the respondent's control. The respondent maintained that the demand for duty would be an additional burden, given the circumstances of the loss. The Tribunal, after considering both sides, concluded that the loss was indeed due to an unavoidable accident, with no negligence on the respondent's part.

3. The Tribunal referenced Rule 147 of the Central Excise Rules, 1944, which allows for the remission of duty on goods lost or destroyed by unavoidable accident. Citing legal precedents, the Tribunal highlighted that the discretion to remit duty must be exercised judiciously, and the refusal should be based on justifiable reasons. The Tribunal also referred to previous court judgments interpreting terms like 'lost or destroyed' and 'accident' broadly to encompass various situations leading to loss or destruction of goods. Ultimately, the Tribunal upheld the findings of the Collector (Appeals) and dismissed the Revenue's appeal.

4. Additionally, the respondent filed a Cross Objection, which was disposed of as both parties had no objections to its consideration. Since no new issues were raised in the Cross Objection, it was dismissed in support of the Collector (Appeals) order. The Tribunal's decision was based on the understanding that the loss of molasses was a result of an unavoidable accident, warranting the remission of duty under the Central Excise Rules.