2012 (12) TMI 302 - AT - Central Excise

Clandestine removal loss of molasses in the storage tank - Revenue says that loss cannot abnormally occurred for one period while loss claimed for a larger period appears to be within the range of 2% - submission of Revenue is that the losses occurring in different circumstances envisaged by Section 35B calls for consideration by the jurisdiction of Revisional authority Held that - Tribunal is conferred with power of Civil Court only to a limited extent as is enacted in Section 129C(7) and (8) of the Customs Act, 1962 - Tribunal has no power to act as Civil Court beyond its jurisdiction - if the appellant so chooses to seek the revisional jurisdiction, it may do so and if there is a delay in seeking remedy before that jurisdiction, it may file application for condonation of delay, which may be considered by that authority in accordance with law - stay application dismissed.

Summary

Issues:
1. Allegation of clandestine removal due to storage loss of molasses during crushing season.
2. Dispute over admissibility of loss percentage and jurisdiction of the Tribunal.

Analysis:
1. The appellant's counsel argued that losses occurring during storage of molasses are natural during the crushing season, and the Board permits a loss of up to 2% for the entire storage period. The show cause notices alleged clandestine removal based on storage loss for a particular period, leading to a demand for payment. However, the counsel contended that there was no material evidence to support the allegation of clandestine removal, and thus, requested for the stay application and appeal to be allowed.

2. On the other hand, the Revenue representative argued that abnormal losses for a specific period could not exceed the permissible 2% loss for the entire storage period. The adjudicating authority's findings supported the allegation of clandestine removal based on the loss of molasses. Therefore, the representative requested the dismissal of the stay application and appeal.

3. The Tribunal noted that the dispute centered around the admissibility of the loss percentage and decided to address the appeal and stay application together. Pre-deposit was waived, and the appeal was disposed of accordingly.

4. Upon reviewing the show cause notice and adjudication order, it was observed that there was no direct or circumstantial evidence supporting the allegation of clandestine removal. The case was deemed to be solely about the loss of molasses during storage, without any evidence of goods being removed or found elsewhere by the authorities.

5. The jurisdiction of the Tribunal was questioned regarding losses under Section 35B of the Central Excise Act, 1944. The appellant's counsel cited a Division Bench order transferring an appeal to the Revisional Authority, but it was clarified that the Tribunal's powers are limited to those specified in the Customs Act, 1962. The Tribunal can act as a Civil Court only within the defined scope of its powers, beyond which the Revisional Authority should be approached for grievances related to losses.

6. Consequently, the stay application was deemed infructuous and dismissed, leading to the dismissal of the appeal as well. The Tribunal's decision was pronounced in the open court, concluding the proceedings.