2009 (7) TMI 1135 - AT - Central Excise

Summary

Issues involved: Duty demand on clearance of glass bottles without payment, application for remission of duty, mention of broken bottles in returns, Board's Circular on breakages limit.

Summary:

1. Duty Demand on Clearance of Glass Bottles:
The appellants, engaged in manufacturing aerated water, soda water, and mineral water, were found to have cleared glass bottles without payment of duty, which were broken during storage and handling. Three show cause notices were issued demanding duty of Rs. 7,50,299. The Original Authority confirmed the duty and imposed a penalty, which was later modified by the Commissioner (Appeals) to Rs. 6,31,585 based on previous Tribunal orders.

2. Application for Remission of Duty:
The appellants argued that the broken bottles during storage and handling were 0.15% and were mentioned in their returns. They submitted that the application for remission of duty was filed in accordance with Board's Circular, which does not require a formal application. They cited relevant Tribunal decisions and Circulars to support their case.

3. Mention of Broken Bottles in Returns:
The Revenue contended that the appellants did not file any application for remission of duty or inform the department about the breakage of glass bottles. They argued that proper documentation and intimation were necessary to claim remission of duty, especially for losses exceeding the prescribed limit.

4. Board's Circular on Breakages Limit:
The Tribunal noted that the appellants had mentioned the quantity of broken glass bottles in their returns, as per the Board's Circular allowing a tolerance limit of 0.5% for breakages. The Tribunal found that the appellants' claim was bona fide and correct, considering the insignificant quantity of losses and compliance with the Circular.

Conclusion:
After considering the arguments and evidence presented, the Tribunal set aside the impugned order, allowing the appeal with consequential relief. The Tribunal emphasized the importance of compliance with the Board's Circular on breakages and upheld the appellants' claim based on previous Tribunal decisions and the factual evidence provided.

(Order dictated and pronounced in open court on 17-7-2009)