2015 (10) TMI 874 - AT - Central Excise

Remission of duty - Destruction of molasses - Held that - Appellant is a State Controlled manufacturing unit engaged in the manufacture of sugar with molasses as its by-product - once remission on the same goods was allowed, there can be no case for confirmation of the demand on the quantity destroyed for which remission has already been granted. - Decided in favour of assessee.

Summary

Issues:
1. Confirmation of duty liability on molasses destroyed in the factory.
2. Remission of duty on the same molasses destroyed in an accident.

Confirmation of Duty Liability:
The appeal was filed against the Order-in-Original (OIO) confirming a demand of &8377; 83,350/- against the appellant for duty liability on molasses destroyed in the factory. The appellant argued that they were separately seeking remission of duty on the same molasses destroyed in an accident. The matter reached CESTAT, where the remission was allowed in appeal No. 2477/2005 based on final order No. A/742/2012-EX (BR) dated 25/6/12. The Adjudicating Authority upheld the demand, but the appellant contended that the remission granted by CESTAT for the same goods should negate the duty liability.

Remission of Duty on Accident-Destroyed Molasses:
The appellant, a State Controlled manufacturing unit producing sugar with molasses as a by-product, sought remission of duty on molasses destroyed in an accident. CESTAT, in its order dated 25/6/12, observed that there was no dispute regarding the loss of molasses and that the accident was not deliberate. CESTAT emphasized the need for a liberal interpretation of Rule 21 of the Central Excise Rules to prevent it from becoming inoperable. Referring to a judgment of the Hon'ble Rajasthan High Court, CESTAT concluded that the remission of excise duty should have been allowed, especially in the absence of evidence of any malafide intention to evade duty. Consequently, CESTAT allowed the remission sought by the appellant, setting aside the impugned order.

Conclusion:
Based on CESTAT's order granting remission on the same goods destroyed in the accident, the confirmation of duty liability by the lower authorities was deemed unnecessary. CESTAT's decision to allow remission on the accident-destroyed molasses led to the acceptance of the appeal filed by the appellant. Therefore, the appeal was allowed, and the demand for duty liability on the quantity of molasses destroyed in the factory was set aside in light of the remission granted by CESTAT.