1999 (11) TMI 456 - AT - Central Excise

Summary

Issues:
Challenge to duty demand for destruction of Hydrochloric Acid without complying with Rules 149 and 173N.

Analysis:
The appellant challenged the duty demand of Rs. 1,16,911.87 imposed by the Collector of Central Excise for destroying Hydrochloric Acid without complying with the provisions of Rules 149 and 173N. The appellant, a manufacturer of Caustic Soda, produced Chlorine Gas as a by-product, which had to be destroyed due to limited demand and hazardous nature. The appellant sought permission for destruction but received Show Cause Notices alleging contravention of rules. The Asstt. Collector confirmed the duty demands, stating non-compliance with Rules 149 and 173N, requiring destruction in the presence of Central Excise Officers and prior intimation at least seven days in advance. The Commissioner (Appeals) upheld the decision, emphasizing the mandatory nature of the rules.

The appellant argued that due to the hazardous nature of Hydrochloric Acid and storage issues, it was not feasible to give seven days' advance notice on every occasion. The appellant had informed the authorities through telegrams and letters, seeking permission for short notice destruction. Despite requests, no Officer was deputed to supervise the destruction. The appellant maintained records and submitted RT 12 returns regularly. The appellant contended that the confirmation of duty demand based on lack of seven days' notice was unjustified.

The Respondent argued that Rules 149 and 173N mandated seven days' advance intimation for destruction, and any non-compliance could not be excused due to difficulties faced by the assessee. Referring to a Madras High Court judgment, the Respondent emphasized the mandatory nature of the rules and the need for strict compliance.

The Tribunal analyzed the rules and observed that Rule 149 required informing the proper Officer in writing at least seven days in advance for destruction of goods. The discretion to prescribe conditions for destruction lay with the Commissioner, considering the nature of goods. In cases like the present one, where the appellant had sought permission for short notice destruction, it was the responsibility of the proper Officer to establish guidelines and conditions for destruction. The Tribunal noted that the appellant had informed the authorities of the destruction and maintained records. Given the circumstances, the Tribunal held that the appeal had merit, setting aside the impugned order and granting consequential benefits to the appellants.