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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 ..... s and detected shortages of 119.962 (MT) of Molasses involving Central Excise duty amounting to Rs. 92,671/- . Statement of Shri Roopesh Goel, Deputy Manager (Commercial) and Authorized Signatory of the applicant was recorded on the spot under Section 14 of the Central Excise Act, 1944. When asked about the reasons for shortage detected in the stock of molasses, he could not put forth any satisfactory reasons. However, he agreed to the shortages detected during physical verification and deposited the duty of Rs. 92,671/- voluntarily vide PLA entry no. 3 dated 27-8-2009. 2.1 A Show Cause Notice dated 17-3-2010 was issued to the applicant for violating Rules 4, 6, 8, 10 and 11 of the Central Excise Rules, 2002 and alleging therein as to why : (a) Central Excise duty amounting to Rs. 92,671/- should not be demanded and confirmed as they have already deposited this amount and it should not be appropriated against the said demand from them under Section 11A of the Central Excise Act, 1944. (b) Penalty should not be imposed on 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. 2.2 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) while confirming the demand of duty relying on judgment of Hon'ble High Court of Allahabad in the case of Kesar Enterprises Ltd. is unsustainable, as the facts and circumstances of the above case are distinguishable as mentioned hereunder :- (i) That in Para 5 of the above-mentioned judgment the Hon'ble High Court has held - "The Tribunal while rejecting this contention of the appellant has held that the appellant had set up a case that the shortage/loss was on account of ''natural cause" but no evidence had been given by the appellant to show that such loss had occurred due to natural causes. On the other hand, the shortfall of 1200.6 quintals of molasses had occurred between 28-10-1998 (i.e. end of October) and 19-1-1999 (i.e. mid-January). That period being winter season, such large amount of shortage could neither be justified by foam formation due to natural heating nor evaporation to any appreciable extent. Thus, loss due to natural causes, as pleaded by the appellant during this period was not established and on the contrary was highly doubtful". That in the above referred case, the Tribunal as well as the Hon'ble High Court has confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en done regularly and precaution has been taken so that the circulating pumps remains operational. It helps in mixing molasses, thus reducing the temperature. That there is no justification to confirm the demand as the applicant has taken due precaution while storing the molasses in steel tanks and the losses have been due to natural causes. 4.3 That in the present case, the Commissioner (Appeals) has clearly held that there is no evidence of clandestine removal, as such there is no intention to evade payment of duty and in the present facts and circumstances of the case provisions of Rule 25 read with Section 11AC of the Act are not applicable. That the confirmation of demand of duty on storage loss of molasses due to natural causes is unjustified and liable to be set aside. 4.4 That the applicant's case is fully covered by the CEGAT judgment in the case of Sarjoo Sahkari Chini Mills Ltd. v. CCE, Lucknow - 2003 (55) RLT 313 = 2003 (161) E.L.T. 826 wherein it is held shortage - molasses loss up to 2% in molasses stored in pucca pit or steel tank - due to evaporation to be condoned-appeal allowed. Hence the Order-in-Appeal is liable to be quashed. That in judgment of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 2.06% as mentioned in the Order of the Commissioner (Appeals) as such the confirmation of demand of duty on molasses loss due to natural causes is unsustainable and liable to be set aside. 5.4 The applicant in support of the above plea have relied upon on the following case laws :- * Balrampur Chini Mills Ltd. v. CCE, Allahabad - 2011 (274) E.L.T. 587 * Seksaria Biswan Sugar Factory Ltd. v. CCE, Lucknow - 2012 (286) E.L.T. 631 * Upper Doab Sugar Mills v. CCE, Meerut-I - 2013 (298) E.L.T. 444 * CCE, Allahabad v. U.P. State Sugar & Cane Dev. Corpn. Ltd. - 2014 (312) E.L.T. 789. 6. Government has carefully gone through the relevant case records available in case files, oral and written submissions and perused the impugned Order-in-Original and Order-in-Appeal. 7. On perusal of records, Government observes that in the instant case issue relating to demand of duty on goods found short during preventive check by the jurisdictional Central Excise Authorities. On visit of team of Central Excise officers of Divisional Preventive, Division-I, Muzaffarnagar, in the factory premises of the applicant on 27-9-2009, physically verified the stock of finished goods, viz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal against such order - (a) a decision or order passed by the Commissioner of Central Excise as an adjudicating authority; (b) an order passed by the Commissioner (Appeals) under Section 35A; (c) an order passed by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) (hereafter in this Chapter referred to as the Board) or the Appellate Commissioner of Central Excise under Section 35, as it stood immediately before the appointed day; (d) an order passed by the Board or the Commissioner of Central Excise either before or after the appointed day, under Section 35A, as it stood immediately before that day: Provided that no appeal shall be to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in clause (b) if such order relates to - (a) a case of loss of goods, where the loss occurs in transit from a factory to a warehouse or to another factory, or from one warehouse to another, or during the course of processing of the goods in a warehouse or in storage, whether in a factory or in a warehouse; (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdictional authorities nor made any claim for such remission. If it were a case of storage loss the applicant should have approached the jurisdictional Central Excise Authorities and it would have also reflected in their records and returns. Further, the applicant in his voluntary statement recorded under Section 14 of the Central Excise Act, 1944 at the time of booking of the case could not put forth any satisfactory reasons for the shortage of goods and voluntarily deposited the duty on the shortage of goods. 10. Government thus finds that the case matter is that pertaining to the non-payment of duty on the quantity of molasses found short and not a case of loss of 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. 11. In view of above discussions Government therefore finds that the revision application filed before Central Government in terms of Section 35EE of Central Excise Act, 1944 is beyond jurisdiction. As such, this revision application is dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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