2018 (2) TMI 683 - AT - Central Excise

Remission of duty - Rule 21 of the Central Excise Rules, 2002 - storage loss - molasses - C.B.E.C. Circular No. 261/15/82/CX-8 dated 18/07/1983 & Circular dated 06/02/1982 - Held that - The said C.B.E.C. Circular No. 261/15/82/CE-13 dated 18/07/1983, has clarified that storage loss of Molasses up to 2% is condonable, when Molasses are stored in Pucca Pits or Steel Tanks. In the present case, the loss stated in the said application dated 18/03/2013 was less than 2%. Therefore, the said loss was condonable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against Order-in-Original denying remission of Central Excise duty for storage loss of Molasses.
- Interpretation of C.B.E.C. Circular regarding condonable storage loss of Molasses up to 2%.
- Admissibility of application seeking remission of duty based on reported loss percentage and time frame.

Analysis:
1. Appeal against Order-in-Original: The appeal arose from an Order-in-Original denying remission of Central Excise duty for a reported storage loss of Molasses by the appellants. The Commissioner rejected the application citing reasons such as one tank exceeding the permissible loss limit and failure to report the loss within 24 hours. The Tribunal reviewed the facts and held that the loss reported was less than 2%, which was condonable as per the relevant Circular.

2. Interpretation of C.B.E.C. Circular: The Tribunal referred to Circular No. 261/15/82/CE-13 dated 18/07/1983, which clarified that storage loss of Molasses up to 2% is condonable when stored in Steel Tanks. The Tribunal found that the loss reported by the appellants fell within the permissible limit specified in the Circular, thereby rendering the denial of remission by the Commissioner unjustifiable in the eyes of the law.

3. Admissibility of application for remission: The Commissioner had contended that the application for remission was not admissible due to the reported loss exceeding 2% in one tank and the delay in reporting the loss. However, the Tribunal disagreed with these reasons, emphasizing that the loss percentage was the determining factor for condonability, not tank-wise discrepancies. The Tribunal set aside the Order-in-Original and allowed the remission of duty as sought by the appellants, granting them consequential relief as per the law.

In conclusion, the Tribunal's decision favored the appellant by allowing the appeal, highlighting the importance of adhering to the provisions of relevant Circulars in determining the condonability of storage losses for excise duty remission applications.