2016 (10) TMI 571 - HC - Central Excise

Denial of remission of Excise Duty - quantity not kept in steel tank - whether denial justified on the ground that quantity which was required to be kept in steel tank was not kept? - Held that - the appellant was duty bound to keep the molasses in the three tanks to their full capacity. Since appellant has not utilized the three tanks to the fullest capacity so the Tribunal was justified in granting remission of excise duty on 15,651 quintals but refused to grant remission on the balance quantity which could be stored in the steel tank - denial of remission justified - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against judgment of Customs, Excise and Service Appellate Tribunal regarding remission application for part quantity of molasses stored in tanks.

Analysis:
The appellant, U.P State Sugar Corporation Limited, filed an appeal against the judgment and Order No. 32/2008 passed by the Customs, Excise and Service Appellate Tribunal, New Delhi. The appellant argued that the Tribunal had rejected the remission application for part quantity of molasses on the basis that the molasses could have been stored in steel tanks to prevent auto combustion. The Tribunal found that the combined capacity of three tanks was 120,000 quintals, but only 107.828 quintals of molasses were stored, leaving an additional 12,172 quintals of storage capacity. The Tribunal also noted that the appellant stored 28,956.20 quintals in an open pit, which was not considered a bona fide act.

The Tribunal granted remission of Excise Duty for 15,651 quintals of molasses but declined to grant remission for the remaining quantity that could have been stored in the steel tank. The High Court upheld the Tribunal's decision, stating that the appellant was obligated to utilize the tanks to their full capacity. Since the appellant did not use the tanks to their maximum capacity, the Tribunal's decision to grant remission for 15,651 quintals was justified. The Court found no illegality in the Tribunal's judgment and consequently dismissed the appeal.