2007 (4) TMI 162 - AT - Central Excise

Remission Loss of molasses intimated to officers Appellant started storing molasses of its sister unit without giving any time to officers to verify the reported loss Remission of duty rejected but no ground to impose penalty and interest

Summary

Issues:
- Application for remission of duty due to loss of molasses during storage
- Rejection of remission application by the Commissioner of Central Excise
- Imposition of penalty and interest

Analysis:
- The appellants, engaged in the manufacture of VP sugar and Molasses, stored molasses from 1998-99, facing a delay in clearance due to a Stay Order from the High Court. A quantity of 224.380 MT of molasses was reported as lost, leading to an application for remission of duty amounting to Rs. 1,21,190. The Commissioner rejected the application, demanding duty of Rs. 1,12,190 and imposing a penalty of Rs. 5,000 along with interest.

- The appellant's advocate argued that due to the High Court's Stay Order, timely cleaning of the tank was hindered, rendering the stored molasses unfit for marketing and consumption. The loss percentage was 4.78%, exceeding the permissible limit of 2% set by the Board. It was contended that since there was no clearance of goods, the demand of duty under Section 11A of the Central Excise Act was not sustainable.

- The Departmental Representative supported the Commissioner's decision, stating that the loss of molasses was not verified by Central Excise Officers, justifying the rejection of the remission application.

- The Tribunal observed that the loss claimed by the appellant was not verified by Central Excise officers, leading to the rejection of the remission application. While upholding the rejection, the Tribunal found no grounds for imposing a penalty or interest, setting them aside. Thus, the appeal was rejected, emphasizing the lack of verification by the authorities as the basis for the decision.