2013 (3) TMI 234 - AT - Central Excise

Remission of Central Excise duty on storage loss of molasses denied - As per the dept. as per CBEC Circular No. 261/15/1/80-CX.8, dated 6-2-1982 vide which storage loss of molasses upto 2% is permissible - Held that - On going through the Board s Circular it is found that the same is to the effect that losses up to 2% in storage of molasses may be condoned. There is nothing in the said circular to restrict the said remission per tank basis. See SHETKARI SAHAKARI SAKHAR KARKHANA LTD. Versus C. C. E., AURANGABAD 1999 (4) TMI 256 - CEGAT, MUMBAI Thus by following the Tribunal s decision above & also by taking note of the fact that total loss of molasses condoned in all the tanks was well below 2%, as also by taking note of the fact that there is no evidence indicating clearance of molasses, remission of duty is required to be granted to the appellant - in favour of assessee.

Summary

Issues involved:
Remission of Central Excise duty on storage loss of molasses.

Analysis:

Issue 1: Interpretation of CBEC Circular on storage loss of molasses
The appeal dealt with the interpretation of CBEC Circular No. 261/15/1/80-CX.8, which allows storage loss of molasses up to 2%. The Commissioner (Appeals) interpreted the circular to permit a 2% loss on a tank-wise basis. The appellant argued that the circular does not mandate tank-wise consideration and relied on a Tribunal decision emphasizing total quantity loss assessment. The Tribunal found no restriction in the circular for tank-wise remission and referenced a prior case highlighting procedural errors in stock verification. The subsequent Tribunal decision cited by the Respondent was deemed to overlook the earlier case's relevance.

Issue 2: Application of remission based on total loss and evidence
Considering submissions and orders, the Tribunal observed the Commissioner's denial of remission for losses exceeding 2% per tank. The Tribunal found the circular allowing condonation of losses up to 2% without tank-wise limitations. Referring to the total loss being below 2% across all tanks, lack of evidence on molasses clearance, and procedural faults in stock verification, the Tribunal concluded that duty remission should be granted. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.

This judgment underscores the importance of interpreting circulars in line with legal principles, considering total loss quantities, and ensuring procedural correctness in stock verification processes for fair adjudication in excise duty remission cases.