2009 (1) TMI 685

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..... lasses in two steel tanks. Rule 21 of Central Excise Rules, 2002 relating to remission of duty provided that where it is shown to the satisfaction of Commissioner that some excisable goods manufactured by the assessee has been lost or destroyed due to natural causes or unavoidable accident or have become unfit for consumption or for marketing at any time before removal, the Commissioner may remit the duty payable of such goods subject to such conditions as may be imposed by him in writing. Molasses after its production is normally stored for a considerable period prior to its clearance in course of which there are some losses due to natural causes. The Board vide circular No. 261/15CC/1/82-CX.8 dt. 6-2-82 has fixed the limit of such losses .....

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..... cular dt. 6-2-82 has fixed the limit of such loss of molasses due to natural cause at 2% and therefore, any loss above 2%, 5.74% in this case, cannot be treated as natural loss; that the loss of 5.74% in tank No. 1 being much higher than the limit of 2% prescribed the Board s circular cannot be treated as natural loss and therefore, there is no question of adjusting the higher loss in tank No. 1 against the lower loss of 0.37% in tank No. 2 and that the Commissioner has gone wrong in considering the total loss of tank No. 1 and tank No. 2. 2.2 Shri S.K. Gadhok, Consultant, ld. Counsel for the respondent pleaded that from the Board s circular, it is clear that it is the total loss which has to be seen and not the loss tankwise; that even i .....

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..... tory are lost or destroyed by natural causes or by unavoidable accident and it is shown by the assessee to the Commissioner satisfaction that this lost has taken place due to natural cause or by unavoidable accident. It is in this regard that the Board has issued the above mentioned circular dt. 6-2-82 that in respect of storage of molasses in tank or katcha pits, the loss of 2% would be treated as due to natural cause and hence remission of duty can be granted. Thus for determining as to whether the remission of duty can be granted what is relevant is whether the loss was due to the natural causes or due to unavoidable accident or not, and with regard to molasses, as per the Board s circular, the loss can be considered as due to natural ca .....

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