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TMI Blog2015 (9) TMI 1530X X X X Extracts X X X X X X X X Extracts X X X X ..... goods due to storage loss. Hence the instant case does not fall with the purview of ambit and scope of provisions contained for Section 35EE read with proviso to Section 35B(1) of the Central Excise Act, 1944 under which the instant revision application has been made. The revision application filed before Central Government in terms of Section 35EE of Central Excise Act, 1944 is beyond jurisdiction - revision application dismissed for being non-maintainable. - F.No. 195/441/2012-RA-CX - 86/2015-CX - Dated:- 28-9-2015 - Ms. Rimjhim Prasad, Joint Secretary Shri Aalak Arora, Advocate, for the Assessee. None, for the Department. ORDER This revision application is filed by M/s. DSM Sugar, Mansurpur (hereinafter referred to as applicant) against the Order-in-Appeal No. 109-CE/MRT-I/2011, dated 28-12-2011 passed by Commissioner of Central Excise Service Tax (Appeals), Meerut-I with respect to Order-in-Original passed by the Assistant Commissioner of Central Excise Division-I, Muzaffarnagar. 2. Brief facts of the case are that the applicant is engaged in the manufacture of sugar and molasses falling under Chapter Sub-Heading Nos. 1701.39 and 1703.10, respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder-in-Appeal, the applicant has filed this revision application under Section 35EE of Central Excise Act, 1944 before Central Government on the following grounds : 4.1 That the Commissioner (Appeals) while confirming the demand of duty on storage loss of molasses has wrongly relied on the judgment of Hon ble High Court of Allahabad in the case of Kesar Enterprises Ltd. as the order is distinguishable on facts and circumstance with the present case. That the portion of the order confirming the demand of duty on storage loss of molasses due to natural causes, is unsustainable and liable to be set aside. 4.2 That the Commissioner (Appeals) in his order has alleged shortages in the stock of molasses comes to nearly 0.39% of total production of molasses of 30715 MT of sugar season 2008-09. That he further held that storage loss less than 2% in respect of molasses due to natural causes i.e. evaporation etc. has been accepted by the Hon ble Tribunal in many cases as well as in the Board s Circular. That it is on record that the clearance of molasses is under physical control of State Excise Authorities, hence he dismissed the charge of clandestine removal of molasses. That the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .B.E. C. vide Circular No. 261/15/82-CX8, dated 18-7-1983 has allowed storage loss up to 2% in steel tanks. That in the present case, the storage loss due to natural causes in steel tanks is 0.39% which is much below the limit prescribed by the Board. That the Board seeing the practical difficulties faced by the sugar industries has prescribed the above limit, hence the storage loss due to natural cause being genuine is liable to be upheld. (iii) That in the present case, the Commissioner (Appeals) in his order has clearly held that storage loss of molasses which the applicant has claimed has occurred during the sugar season 2008-09 and it comes to nearly 0.39% of total production. That it is on record that the clearance of molasses is under physical control of State Excise Authorities, hence he dismissed the charge of clandestine removal of molasses. (iv) That the Hon ble High Court has also held the producer has to show that they have taken precaution during storage of molasses and the storage loss occurred in stock could not be avoided. That in the present applicant s case, the applicant has established that they have taken due precautions while storing the molasses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no corroborative evidence of clandestine removal of goods with intent to evade payment of duty therefore provisions of Section 11AC of the Act are not applicable and accordingly he has set aside equal penalty imposed under Rule 25 read with Section 11AC of the Act. That the said findings of the Commissioner (Appeals) remain unproved. Thus, the demand of duty on alleged shortage of molasses is unsustainable as there is no clandestine removal of goods. 5.2 That the applicant had produced and stored 30715 MT of molasses and against the same have made clearances of 24894.275 MT up to 27-8-2009. That there had been storage loss of 119.962 MT of molasses during the season 2008-09 and the storage loss comes to 0.39% which has been due to natural cause evaporation etc. and the losses have been due to peak summer during May, June and July, 2009 when the atmospheric heat is the maximum. That the applicant has taken all the precaution during storage of molasses i.e. spraying water outside steel tank to control high temperature as well as circulation of molasses in the steel tanks regularly. That the storage loss of molasses being beyond control and has occurred due to natural cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them under Rule 25 of the Rules, read with Section 11AC of the Central Excise Act, 1944 for contravention of the provisions of the above Rules. The Assistant Commissioner, Central Excise, Division-I, Muzaffarnagar vide Order-in-Original No. 50/AC/MZN-I/10, dated 14-10-2010 confirmed the demand of duty amounting to ₹ 92,671/- under Section 11A of Central Excise Act, 1944, already paid and appropriating the same, imposed a penalty of ₹ 92,671/- under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944. Aggrieved by the said order, the applicant filed appeal before the Commissioner (Appeals) Meerut-I, who vide the impugned order partially allowed the appeal by upholding the demand of duty confirmed and set aside the penalty imposed under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. Now the applicant has filed this revision application on the grounds stated in para 4 above. 8. Government further observes that under Section 35EE of the Central Excise Act, 1944, a revision application against the Order of Commissioner (Appeals) passed under Section 35A ibid lies with Government only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its discretion, refuse to admit an application in respect of an order where the amount of duty or fine or penalty, determined by such order does not exceed five thousand rupees. 9. Government notes that the proceedings here have originated with the issue of Show Cause Notice dated 17-3-2010 for violating Rules 4, 6, 8, 10 and 11 of the Central Excise Rules, 2002 for removing the excisable goods without payment of duty. Therefore, the present order is resultant demand of duty under Section 11A of the Central Excise Act, 1944 on the excisable goods cleared without payment of duty and the demand is confirmed on the value of goods found short during the course of a preventive check in the factory of the applicant. The impugned order states that issue to be decided is whether shortage detected during stock taking was actual shortage and whether applicant can claim shortage detected to be storage loss due to natural causes. The shortage due to storage loss if any is not reflected in returns. If there was a storage loss at all the applicant as per general industry practice should have approached the jurisdictional Central Excise Authorities for remission of duty. Government here f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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