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TMI Blog2017 (3) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... category. The arguments advanced in impugned order would not be relevant in this context - reliance was placed in the case of Commissioner of Central Excise, Pune - II v. Daulat SSK Ltd & others [2015 (11) TMI 364 - CESTAT MUMBAI], where it was held that Clearance of free sale sugar by the respondent sugar factories are as per the direction and order of the State or the Central Government, which is covered under the tariff heading number 1701.31 and the Central Excise duty is payable as per the tariff entry. Appeal allowed - decided in favor of appellant. - E/2659 & 2689/2006 - A/86115-86116/17/EB - Dated:- 28-2-2017 - Shri Ramesh Nair, Member (Judicial) Shri C J Mathew, Member (Technical) Appearance: Shri V B Gaikwad, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as regulated by the provisions of the Essential Commodities Act, 1955 and required to conform to the mandates of Levy Sugar Supply (Control) Order 1979 under which the manufacturer was mandated to supply a portion of their production to the Central Government or in such manner as directed by the Central Government. For the relevant period, during the season upto 31st December 1999, during January 2000 to January 2001 and for February 2001 to February 2002, the levy component was 40%, 30% and 15% respectively. Levy sugar was subject to duty of ₹ 52 per quintal under heading 1701.31 while the non-levy sugar was subjected to duty of ₹ 85 per quintal under heading 1701.39 of the First Schedule to the Central Excise Tariff Act, 1985. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Commissioner did not have the benefit of this clarification, it is necessary that the order is set aside and the matter readjudication after considering this clarification and other decisions in the assessed opts to cite and rely on classification and also another issues in this appeal. by order no. A/1474/WZB/2005/C-III/S/688/WZB/2005 dated 16th June 2005. 6. Disregarding the claim of appellant that the additional quantities of sugar was indeed levy sugar supplied on order of Central Government, the adjudicating authority held that classification under heading 1701.31 was intended to cover only such sugar as conformed to the description of that sold under section 3(2)(f) of Essential Commodities Act, 1955 and that any proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffected in subsequent years. First of all these adjustments have not been endorsed/signed by the Directorate of Sugar, and therefore, sans evidentiary value. In fact, in the earlier proceedings also the assessee had stated that they had applied for such adjustments to the competent authority but could not produce such adjustments duly certified. In any case even if Directorate of Sugar are adjusting the supply of levy sugar in subsequent year, then also the fact remains that in the particular year there was clearance of free sale sugar in the guise of levy sugar at a lower rate of duty. In other words, the so called adjustment made by sugar Directorate does not alter the situation legally and more particularly the classification of the disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eared sugar at levy rate which was sought to be denied by central excise authorities. 10. Learned Counsel for appellant urged us to peruse the two rival entries which are: 17.01 -Sugar, other than Khandsari sugar: 1701.31 - Required by the Central Government to be sold under clause (f) of sub-section (2) of section 3 of Essential Commodities Act, 1955 (10 of 1955) 1701.39 Other 11. From this, it would appear that the distinction between the rival entries is the invoking of the Essential Commodities Act, 1955 compelling manufacturer to comply with direction of the Central Government. The impugned order admits that appellant had no choice but to supply sugar, that was otherwise to be sold as free sale , as le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee sale sugar diverted to levy sugar quota. 3. We find that the original authority after going through the case records has dropped the duty demand in view of adjustment of impugned quantity of sugar transferred from free sugar quota to levy sugar and vice versa. 4. We have heard the ld. DR. No material has been produced on behalf of the Department to prove the contrary that appellants have either short paid the duty or they have been any way compensated by the Govt. of India and thereby they have enriched themselves at the cost of the Govt. revenue. Hence, we are of the view that the impugned order passed by the lower appellate authority reversing the order of the original authority is not sustainable. Accordingly, we set aside t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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