2010 (3) TMI 511 - AT - Central Excise

Demand Remission of duty - the appellant company had cleared 9156.6 M.T. of molasses without payment of Central Excise Duty claiming that the same has destroyed in fire accident due to auto combustion on 6-4-07 in RCC tank No. 4, that they have also deducted the said quantity of molasses from the stock available as on 6-4-07 and that they have not sought the necessary permission from the Competent Authority for remission of duty involved on such quantity of molasses. Held that prima facie application for remission to be first decided and then SCN be taken up. Impugned order deciding SCN without taking any decision on remission application not sustainable. Matter remanded.

Summary

Issues:
- Delay in filing appeal
- Condonation of delay
- Duty remission application
- Adjudication of duty demand
- Imposition of penalty
- Compliance with Central Excise Act
- Stay applications

Delay in filing appeal:
An appeal was filed with a sixteen-day delay, attributed to confusion regarding separate appeals for the company and its Managing Director. The delay was deemed unintentional, and condoned after review.

Duty remission application:
The company's application for remission of duty on molasses destroyed in a fire was a pivotal issue. The company claimed prompt reporting of the incident to authorities, submission of the remission application, and subsequent reminders for a decision. The Commissioner's denial of receiving the remission application despite evidence led to a remand for de novo adjudication.

Adjudication of duty demand:
A show cause notice was issued seeking recovery of Central Excise Duty due to molasses clearance without payment. The Commissioner confirmed the duty demand, imposed penalties, and overlooked the pending remission application, leading to the set aside of the order for reevaluation post remission decision.

Imposition of penalty:
Penalties were imposed on the company and its Managing Director under the Central Excise Act for duty evasion. The Commissioner's decision was questioned due to the failure to consider the pending remission application before confirming the duty demand and imposing penalties.

Compliance with Central Excise Act:
The judgment emphasized compliance with the Central Excise Act, highlighting the necessity to address remission applications before adjudicating duty demands to ensure procedural fairness. The need for a decision on remission applications before imposing penalties was underscored.

Stay applications:
The appeals were initially listed for stay, but after review, the Tribunal decided to proceed with final disposal, waiving the pre-deposit requirement. The importance of addressing pending remission applications before further adjudication was reiterated.

The judgment focused on procedural fairness, emphasizing the need to address pending duty remission applications before confirming duty demands and imposing penalties. The Tribunal remanded the matter for reevaluation post remission decision, highlighting the significance of compliance with the Central Excise Act for a just adjudication process.