2009 (10) TMI 447 - AT - Central Excise

Rectification of mistake- The Tribunal dismissed the appeal of the assessees against the rejection of the claim for remission of duty on molasses, upholding the finding of the adjudicating authority that since the place of storage of molasses was not approved as required and further since only two out of four tanks were in good condition, the loss of molasses had occurred due to negligence and willful act of the assessees and not due to natural causes or unavoidable accident so as to entitle the assessees to remission of duty.

Summary

Issues:
1. Remission of duty on molasses claim rejection.
2. Rectification of mistakes and additional legal grounds for remission of duty.
3. Approval of storage place for molasses.
4. Liability to pay duty until removal of goods.
5. Error apparent on record in storage place approval.
6. Dismissal of ROM application.

Analysis:
1. The Tribunal dismissed the appeal against the rejection of the claim for remission of duty on molasses, upholding that the loss occurred due to negligence and willful act of the assessees, not natural causes, as required for remission.

2. The applicants sought rectification of mistakes and raised additional grounds citing statutory rights for remission of duty. The Tribunal allowed the additional legal grounds to be raised as they were considered valid.

3. The Tribunal noted that the open tanks for storage of molasses were not specifically approved as required under Rule 47(3) of the Central Excise Rules, 1944, even though the ground plan of the factory premises was approved.

4. Rule 49(1) stipulates that duty is not required to be paid until goods are about to be issued out of the approved place of storage. In this case, since the place of storage (open tanks) was not approved, the duty liability was not sustainable.

5. The Tribunal found no merit in the plea that the storage place was approved, as the open tanks were not specifically approved as required by the rules. The destruction of molasses in unapproved open tanks due to rain was attributed to negligence, not natural causes.

6. The ROM application was dismissed as the Tribunal concluded that the destruction of molasses was due to carelessness and negligence of the applicants, and seeking to reargue the appeal through the ROM application was not permissible in law.

This detailed analysis of the judgment provides insights into the various legal issues addressed by the Appellate Tribunal CESTAT, CHENNAI regarding the remission of duty on molasses and the approval of storage places, along with the application of relevant legal principles and precedents in reaching their decision.