1994 (6) TMI 104 - AT - Central Excise

Summary

Issues:
1. Duty demand on molasses stored in temporary pits beyond permission validity.
2. Applicability of Rule 49 in case of destruction of goods due to natural causes.
3. Requirement of remission application for duty on destroyed goods.
4. Interpretation of duty payment under Rule 49 in the context of natural causes.

Analysis:
1. The appeal involved M/s. Sarjoo Sahakari Chini Mills Ltd. challenging a duty demand of Rs. 3,48,790.05 on 1,10,727 quintals of molasses stored in temporary pits beyond the permission validity. The Collector (Appeals) upheld the demand citing unauthorized storage and lack of duty remission application by the appellants. The Tribunal noted the destruction of molasses due to floods and the contention that no removal occurred within Rule 49 framework.

2. The Advocate argued that duty can only be demanded upon actual removal, emphasizing the destruction of molasses and reliance on case laws supporting no duty imposition for goods lost to natural causes. The Department Representative countered by highlighting the absence of evidence for permission extension requests and remission applications, distinguishing cited cases based on permission status and cause of destruction.

3. The Tribunal acknowledged the failure to apply for remission and lack of verification on the extent of loss due to natural causes. Referring to precedents, it emphasized the need for evidence establishing loss from natural causes and the duty non-requirement in such scenarios under Rule 49. The Tribunal directed a remand to verify the loss cause and instructed against duty imposition if proven due to natural causes.

4. Rule 49 was interpreted to mandate duty payment only upon goods' issuance or removal, exempting losses from natural causes. The Tribunal emphasized the necessity of authorities satisfying themselves on the loss cause before demanding duty. The decision highlighted the duty exemption for goods lost or destroyed by natural causes, emphasizing the importance of verifying such losses before imposing duty obligations. The appeal was allowed for remand to reassess the duty imposition based on the cause of molasses loss or destruction.