2012 (7) TMI 322 - AT - Central Excise

Claim for remission of duty on ground of molasses stored in kutcha pit being deteriorated and ultimately getting destructed - assessee contended that from perusal of the second proviso of erstwhile Rule 49 (l) of CER. 1944, there is no ambiguity that duty is not demandable on any goods which become unfit for consumption due to natural causes - Held that - Commissioner disallowed the remission for duty only for the periods 1982-83 and 1983-84 on ground that assessee were responsible for any deterioration and they are required to pay duty leviable thereupon whereas Commissioner allowed the remission for the period, 1991-92 on ground that goods were deteriorated and become unmarketable due to reasons beyond the control of the assessee. In view of contradictory orders of Commissioner, dis-allowance of remission for the years, 1982-83 and 1983-84, is not sustainable - order is set aside.

Summary

Issues:
- Disallowance of remission of duties for specific periods.
- Interpretation of rules regarding duty payment on deteriorated goods.
- Validity of Board's circular on storing molasses in kutcha pit.
- Applicability of statutory provisions over departmental instructions.

Analysis:
1. The Appellant filed an Appeal against an Order disallowing remission of duties for certain periods. The Appellant, engaged in sugar molasses manufacturing, destroyed molasses for specific seasons, leading to duty demands. The Commissioner allowed remission for some periods but confirmed demand for others. The Appellant contended that duty was not demandable on goods unfit for consumption due to natural causes, as per Rule 49(1) of the erstwhile CER, 1944. They argued that the goods deteriorated beyond their control, and the Commissioner's findings supported this. The Appellant cited legal precedents and challenged the Board's circular imposing duty payment on deteriorated goods stored in kutcha pit.

2. The Appellant argued that the Board's circular contradicted statutory provisions allowing remission for deteriorated goods. They relied on Tribunal decisions supporting their stance. The Commissioner's findings acknowledged the goods' deterioration beyond the Appellant's control, indicating eligibility for remission. The Appellant emphasized that the Board cannot issue instructions against statutory provisions. The Appellant's contentions were supported by legal precedents and the Commissioner's own findings, highlighting the inconsistency in disallowing remission for certain periods.

3. The Tribunal analyzed the submissions and found the Commissioner's decision to disallow remission for specific periods as self-contradictory. The Tribunal set aside the Commissioner's order and allowed the Appeal, granting consequential relief as per law. The Tribunal emphasized the Appellant's genuine claim for remission based on circumstances beyond their control, supported by chemical reports and State Excise Authorities' supervision of destruction. The Tribunal's decision favored the Appellant's argument regarding the remission of duty on deteriorated goods, highlighting the statutory provisions' precedence over departmental instructions.

4. In conclusion, the Tribunal's judgment favored the Appellant's position, emphasizing the statutory provisions allowing remission for goods deteriorated due to uncontrollable factors. The Tribunal's decision highlighted the importance of upholding statutory provisions over departmental instructions, ensuring fair treatment based on legal principles and precedents.