2004 (5) TMI 151 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-original for remission of duty on destroyed molasses under Rule 49 of Central Excise Rules.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved a dispute regarding the remission of duty for molasses destroyed during handling and storage by the appellants, who were engaged in the manufacture of sugar and molasses. The Commissioner of Central Excise had rejected the appellants' application for remission of duty, citing non-compliance with the procedure of applying within 24 hours from the loss of goods. The appellants argued that the shortage was less than 2% and relied on Board's Circulars and previous Tribunal decisions to support their claim for remission of duty. They contended that the variation in stock was less than 1%, making them eligible for duty remission.

The Revenue, on the other hand, contended that the appellants had not followed the proper procedure by failing to inform the department within 24 hours of the loss. The appellants, engaged in sugar manufacturing, highlighted that molasses were a by-product received in tanks under the control of the State Excise Authority, emphasizing that no molasses could be removed without permission. They also pointed out that the loss was less than 1%, a fact not disputed by the Revenue. The appellants referenced Tribunal decisions which held that losses of less than 2% in sugar industries were condonable, further supporting their claim for duty remission.

Considering the Board's circulars and the precedents set by previous Tribunal decisions, the Appellate Tribunal set aside the impugned order passed by the Commissioner of Central Excise and allowed the appeal of the appellants. The Tribunal's decision was based on the interpretation of rules, circulars, and legal principles governing the remission of duty in cases of destroyed goods, particularly in the context of sugar and molasses manufacturing industries.