2017 (2) TMI 474 - HC - Central Excise

Clandestine removal - Section 35-G of Central Excise Act, 1944 - Held that - Revenue, at the outset, could not dispute that Commissioner (Appeals) as well as Tribunal both have recorded a finding of fact that there is no clandestine removal of molasses from Factory premises and that finding of fact recorded concurrently having not been shown to be perverse or contrary to record - appeal dismissed - decided against Revenue.

Summary

Issues:
- Interpretation of Central Excise Act, 1944 regarding storage of Molasses in Katcha pits
- Determination of duty payment on clearance of molasses

Analysis:

Issue 1: Interpretation of Central Excise Act, 1944 regarding storage of Molasses in Katcha pits
The appeal under Section 35-G of the Central Excise Act, 1944 arose from a judgment by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi. The appellant raised the issue of whether the storage of Molasses in Katcha pits, in contravention of Circular No. 35/88 dated 01.08.1988 without payment of Central Excise duty, should be considered clandestine removal. The High Court noted that both the Commissioner (Appeals) and the Tribunal had found no evidence of clandestine removal of molasses from the factory premises. As these findings were not shown to be perverse or contrary to the record, the Court held that there was no reason to interfere, ultimately ruling against the Revenue on this issue.

Issue 2: Determination of duty payment on clearance of molasses
The second substantial question of law raised in the appeal was whether the Tribunal was justified in holding that the molasses had been cleared on payment of duty at an appropriate rate. The respondent had paid duty at a rate of 20 per cent ad valorem, while the effective rate of duty at the time of clearance was ?50/- per quintal. The High Court, after considering the arguments, found that the appeal lacked merits and dismissed it. This decision indicates that the Court upheld the Tribunal's determination regarding the payment of duty on the clearance of molasses.

In conclusion, the High Court's judgment in this case clarified the interpretation of the Central Excise Act, 1944 concerning the storage of Molasses in Katcha pits and the determination of duty payment on the clearance of molasses. The Court's decision was based on the findings of fact by the lower authorities and resulted in the dismissal of the appeal.