2016 (7) TMI 233 - CGOVT - Central Excise

Demand of duty on export of goods without payment of duty - export of Linear Alkyl Benzene (LAB) under UT-I for export under the provision of Rule 19 of Central Excise Rules, 2002 - it was noticed that 7.921 M.T. of LAB were short shipped/not exported by the applicants. - Condonation of delay in filing revision application due the reason the applicant was pursing the matter with the wrong forum - Held that - As such after excluding time elapse before Tribunal, the applicant filed the Revisional Application in 49 days. As such the Applicant has been filed within the stipulated period. Government now proceeds to examine the case on merits. Commissioner (Appeals) has held the applicant to be ineligible for the benefit of Circular No. 292/8/97-CX dated 24.01.1997 holding the said Circular to be applicable to NGL only. On perusal of the above Circular, it is crystal clear that the benefit is only admissible to the Natural Gasoline Liquid (NGL) and not for any other commodity. The Board after considering the nature of loss being occurred specifically in NGL has prescribed the percentage for the particular item only. Admittedly, the goods manufactured and cleared by the assessee is not NGL and as such they are not eligible for the benefit of the above circular, as rightly held by the Commissioner (Appeals). - Demand confirmed - Decided against the assessee.

Summary

Issues Involved:
1. Remission of duty under Rule 21 of Central Excise Rules, 2002.
2. Applicability of Board's Circular No. 292/8/97-CX dated 24.01.1997.
3. Condonation of delay in filing the Revision Application.

Issue-wise Detailed Analysis:

1. Remission of Duty under Rule 21 of Central Excise Rules, 2002:

The applicant, engaged in the manufacture of Linear Alkyl Benzene (LAB), sought remission of duty for 7.921 M.T. of LAB not exported due to natural causes during transit. The Assistant Commissioner rejected the remission request, confirming the demand for duty, interest, and penalty, as the applicant failed to prove that LAB is the same as Natural Gasoline Liquid (NGL) to qualify for losses under the Board's Circular No. 292/8/97-CX dated 24.01.1997. The Commissioner (Appeals) upheld this decision. The applicant argued that the short quantity was due to natural causes and should be remitted under Rule 21. However, Rule 21 allows remission only if goods are lost or destroyed before removal from the factory. Judicial precedents, including S.V.G. Exports (P) Ltd. vs. CC, Chennai-Ill and Ginni Filaments Ltd. vs. CCE, Lucknow, support that remission is not applicable for losses occurring after removal from the factory. Therefore, the applicant's contention for remission under Rule 21 was found meritless.

2. Applicability of Board's Circular No. 292/8/97-CX dated 24.01.1997:

The applicant argued that the Board's Circular, which allows for remission of duty for NGL, should be applied to LAB. However, the Commissioner (Appeals) and the Government found that the Circular specifically applies to NGL and not to LAB. The Circular was issued considering the specific nature of losses in NGL, and thus, its benefits cannot be extended to LAB. The applicant's reliance on this Circular was therefore invalid.

3. Condonation of Delay in Filing the Revision Application:

The applicant requested condonation of delay in filing the Revision Application, explaining that they initially filed an appeal before the CESTAT, which was dismissed on jurisdictional grounds. The Government noted that the period spent in prosecuting the appeal before the CESTAT should be excluded as per Section 14 of the Limitation Act, 1963. After excluding this period, the Revision Application was filed within the stipulated time. Therefore, the delay was condoned.

Conclusion:

The Government upheld the Commissioner (Appeals)'s decision, rejecting the applicant's request for remission under Rule 21 and the applicability of the Board's Circular to LAB. The Revision Application was dismissed as devoid of merit.