2017 (11) TMI 2003 - AT - Central Excise

Availment of remission of duty suo motto - leaked and burst bottles - manufacture of Water, Aerated Water, Soda Water, Fruit Pulp etc. - month of February 2008 and March 2008 - demand of duty with interest and penalties - applicability of Board's Circular dated 08.09.1971, with regard to allowable limit of breakage of bottles - HELD THAT - The Board Circular is binding on the Revenue Officer as held by the Hon'ble Supreme Court in various decisions - Reliance can be placed in the case of M/S. PEPSICO INDIA HOLDINGS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-VII 2012 (8) TMI 409 - CESTAT, KOLKATA where it was held that the allowance as indicated in the Board s circular does not relate to breakage owing to pressure-filling with CO2 and is relevant to breakage in course of handling. Even in that case, the physical verification vis- -vis quantification of breakage is mandatory. Since the same could not be done, the benefit arising out of the Board s circular could not be extended. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Demand of duty on remission of duty for leaked and burst bottles.
- Applicability of Board's Circular dated 08.09.1971.
- Requirement to file application for remission of duty under Rule 21 of the Central Excise Rules, 2002.
- Binding nature of Board Circular on Revenue Officer.
- Interpretation of various case laws related to the issue.

Analysis:

1. Demand of duty on remission of duty for leaked and burst bottles:
The case involved a Show Cause Notice proposing a duty demand due to the appellant availing remission of duty for leaked and burst bottles. The Adjudicating authority confirmed the demand, which was upheld by the Commissioner (Appeals). The appellant challenged this decision through an appeal.

2. Applicability of Board's Circular dated 08.09.1971:
The appellant argued that breakage of bottles of aerated water up to 0.50% of total production is allowable as per the Board's Circular dated 08.09.1971. The Commissioner (Appeals) noted the requirement for filing an application for remission of duty under Rule 21 of the Central Excise Rules, 2002, and emphasized the need to stay within the scope of the Act and Rules.

3. Requirement to file application for remission of duty under Rule 21:
The Commissioner (Appeals) highlighted the necessity for the appellant to follow the prescribed procedure of filing an application for remission of duty under Rule 21. Failure to adhere to this process could lead to the imposition of duty demand and penalties.

4. Binding nature of Board Circular on Revenue Officer:
The Member (Judicial) emphasized the binding nature of the Board Circular on Revenue Officers, citing various case laws to support this assertion. The Circular's applicability and adherence were considered crucial in determining the validity of the remission of duty in cases of leaked and burst bottles.

5. Interpretation of various case laws related to the issue:
The judgment referred to several case laws, including decisions by the Hon'ble CESTAT Kolkata and other tribunals, to underscore the importance of following established legal precedents in matters concerning remission of duty for damaged goods. The Member (Judicial) ultimately set aside the impugned Order and allowed the appeal filed by the appellant based on the discussions and case law references provided.

This detailed analysis of the judgment covers the key issues addressed in the case, focusing on the demand of duty, applicability of relevant circulars and rules, and the significance of legal precedents in determining the outcome of the appeal.