2012 (12) TMI 909 - AT - Central Excise

Revenue contends that Discrepancies claimed in respect of molasses loss by natural causes were denied and remission on 10710.50 quintals of molasses is ordered to be not permissible - Held that - There may be volatility in the quantity in view of spirit element in molasses. But possible volatility was neither pleaded nor evidence was led by the appellant before adjudicating authority in that regard. Even that was not challenged questioning the manner of arriving at loss bringing out peculiar nature and factual circumstances. - When reasoned order of adjudication lends support to the case of Revenue it is difficult to discard the finding of adjudication. Accordingly demand of excise duty is confirmed followed by interest if any. It may be stated that learned Adjudicating Authority has reduced the penalty to 25% of duty element. Such an option being permitted by law it would be proper to extend the same option of reduction in penalty confining that to 25% of duty demand which shall be reasonable and proper in the eyes of law - Decided partly in favour of assessee.

Summary

Issues:
1. Discrepancies in molasses storage and loss assessment.
2. Adjudication error favoring Revenue.
3. Permissibility of remission on molasses loss.
4. Evidence and reasoning supporting rejection of remission application.
5. Confirmation of excise duty demand and penalty reduction.

Analysis:
The judgment addresses the objection raised by the Appellant regarding the difficulty in assessing the loss in molasses storage tanks due to natural causes. The Adjudicating Authority's decision to deny remission on 10710.50 quintals of molasses is challenged, alleging an error in favor of the Revenue. The Learned Counsel argued against the discrepancies claimed in molasses loss, emphasizing the challenges in assessing such losses accurately. However, the Adjudicating Authority found no perversity in its conclusion, citing the high loss percentage compared to the permissible limit, which was not adequately explained or supported by evidence from the Appellant.

The judgment further discusses the lack of evidence or challenge to the manner of calculating the loss, highlighting the verification process by state Excise Officers and the significant discrepancy in the claimed remission quantity. The Adjudicating Authority's reliance on this evidence and reasoning provided a sound basis for rejecting the remission application. Despite the potential volatility in molasses quantity due to its nature, the Appellant failed to present evidence or challenge the findings effectively, leading to the confirmation of the excise duty demand and a reduction in penalty to 25% of the duty element.

Ultimately, the judgment confirms the adjudication order, except for extending the option of penalty reduction to 25% of the duty demand. The Appellant is directed to pay the reduced penalty along with the duty within 30 days of receiving the order, failing which the entire penalty will become payable. This decision emphasizes the importance of providing substantial evidence and challenging findings effectively in cases involving remission applications and excise duty demands to ensure a fair and lawful outcome.