2007 (2) TMI 59

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..... o was engaged in the manufacture of V.P. sugar and molasses, claimed that there was total shortage of 52.160 MT of molasses which was 0.21% of the total quantity stored. This storage loss according to the appellant had occurred during the period from November 2002 to October 2003 as a normal and genuine loss. It was pleaded that, such storage loss, which was less than the maximum permissible 2%, as contemplated by the circular of the Board dated 18th July 1983 was condonable. It was prayed that the storage loss of 52.160 MT as shown in the RG-1 register during the month of October 2003 may be condoned in the light of the instructions and clarification issued by the Board. 3. The Commissioner, holding that intimation about the storage lo .....

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..... thereafter attributing the loss to leakage at the time of transferring the stock of molasses to the tankers. 7. Under Section 5 of the Central Excise Act, 1944, provision for remission of duty on goods found deficient in quantity has been made. By sub-section (1) of Section 5, the Central Government is empowered to make rules for providing for remission of duty of excise leviable on any excisable goods which due to any natural cause are found to be efficient in quantity. Rule 21 of the Central Excise Rules, 2002 is referable to Section 5 of the said Act and provides for remission of duty. Under this rule, the assessee is required to satisfy the Commissioner about the loss of the goods or destruction by natural causes or by an unavoidabl .....

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..... y, flood, cyclone, fire which would be causes from the point of occurrence of which 24 hours could be computed. In the losses such as, due to seepage, evaporation or other such causes in the stored goods, it may not be possible to detect the loss at the time when it occurred as it may be possible in cases of losses due to flood, fire etc. Moreover, such a procedural requirement provided by a Trade Notice cannot override or delimit the operation of the statutory rules. Rule 21 of the said rules does not prescribe such narrow time limit for intimation of the losses. 7.1 In the present case, when the storage loss of 52.160 MT of molasses which undisputedly was only 0.20% of the total quantity and was within the permissible limit of condona .....

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