2005 (2) TMI 300 - AT - Central Excise

Summary

Issues:
1. Remission of duty for molasses lost during storage.
2. Interpretation of Central Excise Rules regarding remission of duty.
3. Consideration of spillage loss for remission.

Analysis:
The judgment by the Appellate Tribunal CESTAT, NEW DELHI involved the issue of remission of duty for molasses lost during storage. The appellants sought remission for a small quantity of molasses lost during storage, which was rejected by the impugned orders citing that spillage loss is not eligible for remission, only storage loss is covered. The learned Chartered Accountant for the appellant argued that losses during storage are accepted, and a condonable limit of up to 2% is prescribed by the Central Board. The appellant's claim for spillage loss was also emphasized as inevitable during handling. However, there was no separate data available for quantities lost due to each reason.

The judgment analyzed the appellant's claim in terms of the proviso to Rule 49 or Rule 21 of the Central Excise Rules. The proviso to Rule 49 explicitly covered both storage and handling losses. While Rule 21 did not mention 'handling' specifically, the reference to "unavoidable accident at any time before removal" was deemed to include handling losses as well. In this case, the losses were minimal and attributable to unavoidable losses during handling and storage. The denial of remissions was found to be incorrect, leading to the setting aside of the impugned orders and allowing the appeals with any consequential relief to the appellants. The judgment highlighted the importance of considering both storage and handling losses for remission under the Central Excise Rules, especially when losses are insignificant and unavoidable.