2016 (2) TMI 213 - AT - Central Excise

Remission of duty - molasses lost during storage under Rule 21 of the Central Excise Rules - information delayed for occurrence of loss - Held that - Remission of duty in terms of Rule 21 is permissible subject to the satisfaction that the goods are lost by natural causes. Even if the applications were not submitted within the prescribed time, although Revenue has not been able to show us the Board Circulars, no evidence is on record to show that the loss did not occur. It is also not on record whether during the three year period in question, the unit was ever visited by officers of the Audit etc. and whether any effort to investigate was made. The substantive benefit cannot be denied on the technical ground that the information was not given to the Revenue within 24 hours. It is not disputed that the loss is within the prescribed limit of 2%. Rule 21 does not lay down any procedure for giving information within 24 hours. Therefore, the substantive benefit cannot be denied in the statute by prescribing time limit of 24 hours, which is not laid down in law. - Decided in favour of assessee

Summary

Issues:
- Appeal against Order-in-Original for remission of duty on lost molasses.
- Submission of applications for remission of duty.
- Rejection of applications due to lack of date of submission.
- Consideration of applications as submitted.
- Investigation by department and verification of shortage.
- Permissibility of remission of duty under Rule 21.
- Denial of benefit on technical grounds.
- CESTAT judgments relied upon for decision.

Analysis:
The appeal was filed against Order-in-Original for seeking remission of duty on molasses lost during storage. The appellant filed applications for remission of duty for the years 2003-04 to 2005-06 under Rule 21 of the Central Excise Rules. The Asstt. Commissioner reported that the losses were within the prescribed limit of 2% year-wise. However, the applications were rejected by the adjudicating authority due to the lack of the date of information about the loss in each case.

Upon hearing both sides, it was noted that copies of the applications for remission of duty were submitted along with the appeal. The Revenue claimed that there was no proof of such applications being submitted. The Tribunal considered that since the impugned order mentioned the submission of applications, it could be accepted that the applications were indeed submitted. It was emphasized that once the applications are considered submitted, it is the department's responsibility to conduct any necessary investigation.

The Tribunal highlighted that remission of duty under Rule 21 is permissible if the goods are lost by natural causes. Even though the applications were not submitted within the prescribed time, the Tribunal held that the substantive benefit cannot be denied on technical grounds. It was noted that there was no evidence to show that the loss did not occur and that the loss was within the prescribed limit of 2%. The Tribunal also referred to CESTAT judgments to support its decision, emphasizing that the statutory benefit cannot be denied based on a time limit of 24 hours, which is not specified in the law.

Ultimately, the appeal was allowed, and the decision was dictated and pronounced in court on a specific date.