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TMI Blog2023 (6) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... s to why the remission application may not be rejected and the duty may not be demanded - In the entire show cause notice, which is on record, there is no allegation that the petitioners had clandestinely removed the molasses in contravention of Rule 8 and had not paid the duty thereupon. In the absence of any allegation to the effect in the show cause notice and a consequent finding that the goods were removed without payment of duty, the duty cannot be levied under Section 11A of the Act even if the remission application is liable to be dismissed. In the present case, even with regard to the grounds for rejecting the remission application, the Authorities were of the view that the loss as claimed in a very small period makes the whole issue suspicious, this view was formed treating the measurement as done by the State Excise Authorities to be the correct method for valuation completely ignoring the fact that the remission as claimed by the petitioners was over a larger period of the assessment year, thus, the same is also contrary to the law as laid down by this Court in the case of BALRAMPUR CHINI MILLS LTD. VERSUS THE COMMISSIONER CENTRAL EXCISE ALLAHABAD [ 2017 (2) TMI 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit that flows from Central Board of Excise and Customs (C.B.E. C.) Circular No. 261/15-CC/1/80-CX, dated 6-8-1982 and the petitioner was called to show cause as to why the remission application may not be rejected and why Central Excise Duty amounting to Rs. 1,79,670/- may not be recovered under Section 11A of the Central Excise Act (hereinafter referred to as the Act ) alongwith interest under Section 11AB of the Act. The duty demanded as referred above, was in respect of Steel Tank No. 1 for the petitioner s factory. With regard to Steel Tank No. 3, the duty demanded was Rs. 1,08,236/-. 6. The two show cause notices, both dated 7-1-2009, were replied to by the petitioner mainly reiterating that the loss was within the prescribed limit and the petitioner was entitled to the benefit of the said circular. The demand mentioned in the show cause notice was confirmed vide Order-in-Original dated 31-12-2009; the claim of the petitioner with regard to the remission of duty was rejected mainly on the ground that on physical verification as done from time to time, no substantial loss was found till 23-6-2008 and all of a sudden in 81 days, the loss as claimed by the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( Mankapur Chini Mills v. U.O.I. Others ) Tank No. 1 Tank No. 2 Tank No. 1 Tank No. 2 Tank No. 1/Tank No. 2 29-3-2008 15-10-2008/ 29-12-2009/ 20-6-2011/ 28-1-2013 3787. 30 2448.40 - - /1.34 2,92,569/-/ 1,89,139/- Writ-C No. 1002513/ 2013 ( Mankapur Chini Mills v. U.O.I. Others ) Tank No. 1 Tank No. 2 Tank No. 1 Tank No. 2 Tank No. 1/Tank No. 2 29-3-2008 15-10-2008/ 29-12-2009/ 20-6-2011/ 28-1-2013 362320 312838 5743.70/ 1.59 5249.20/ 1.68 4,73,702/-/ 4,05,501/- Writ-C No. 1002512/ 2013 ( Balrampur Chini Mills v. U.O.I. Others ) Tank No. 4 Tank No. 5 Tank No. 4 Tank No. 5 Tank No. 4/ Tank No. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a formation of froth. In any case, he argues that the remission as claimed by the petitioner was well within the prescribed limit as accepted by the department while issuing the Circulars dated 18-7-1983, 22-10-1982 and 6-8-1982 wherein the claim of loss upto the extent of 2% is liable to be condoned. 9. Learned Counsel for the petitioners argues that the said circulars issued by C.B.E. C. are binding on the department and the department could not have taken the view ignoring the said circulars as has been done by the impugned orders. He next submits that this issue as to the loss during a particular year or from the last date of the verification would be relevant and this Court while deciding the issue in Balrampur Chini Mills Ltd. v. Commissioner of C.Ex., Allahabad, 2017 (349) E.L.T. 206 (All.) has observed in Para - 4 as under : 4. Admittedly, there is no allegation made by respondents that there is an abrupt removal of molasses from storage tank so as not to justify remission of aforesaid loss. In absence of any such allegation as also any statutory provision providing that the period of a year will not include part of year, if loss is less than two per cent, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the duty has not been paid at the time of removal or the goods have been clandestinely removed, he argues that if the goods are not found in the premises there is a presumption that the goods have been clandestinely removed. On the strength of the said, he argues that the writ petitions are liable to be dismissed. 14. To analyze the submissions made at the Bar it is relevant to refer to the statutory provisions as contained in the Act being Section 11A and Rules 4, 8 21 of the Central Excise Rules (hereinafter referred to as the Rules ), which govern the issue. This Court while deciding the issue which arose in the case of Kishan Sahkari Chini Mills Ltd. (supra) had considered the scope of Section 11A of the Act and Rule 4, 8, 21 25 of the Rules. The said Section and Rules are quoted herein below : SECTION 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xx (7A) Notwithstanding anything contained in sub-section (1) or sub-section (3) or sub-section (4). the Central Excise Officer may, serve, subsequent to any notice or notices served under any of those sub-sections, as the case may be, a statement, containing the details of duty of central excise not levied or paid or short-levied or short-paid or erroneously refunded for the subsequent period, on the person chargeable to duty of central excise, then, service of such statement shall be deemed to be service of notice on such person under the aforesaid sub-section (1) or sub-section (3) or sub-section (4) or sub-section (5), subject to the condition that the grounds relied upon for the subsequent period are the same as are mentioned in the earlier notice or notices. (8) Where the service of notice is stayed by an order of a court or tribunal, the period of such stay shall be excluded in computing the period of two years referred to in clause (a) of sub-section (1) or five years referred to in sub-section (4), as the case may be. (9) Where any appellate authority or tribunal or court concludes that the notice issued under sub-section (4) is not sustainable for the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case where the liability of duty not paid or short-paid is self-assessed and declared as duty, payable by the assessee in the periodic returns filed by him, and in such case, recovery of non-payment or short-payment of duty shall be made in such manner as may be prescribed. Explanation 1. - For the purposes of this section and section 11AC,- (a) refund includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) relevant date , means, - (i) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid, and no periodical return as required by the provisions of this Act has been filed, the last date on which such return is required to be filed under this Act and the rules made thereunder; (ii) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid and the return has been filed, the date on which such return has been filed; (iii) in any other case, the date on which duty of excise is required to be paid under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y leviable on such molasses, in the same manner as if such molasses have been produced by the procurer. (3) xx xx xx (4) Notwithstanding anything contained in sub-rule (1), Principal Commissioner or Commissioner, as the case may be may, in exceptional circumstances having regard to the nature of the goods and shortage of storage space at the premises of the manufacturer where the goods are made, permit a manufacturer to store his goods in any other place outside such premises, without payment of duty subject to such conditions as he may specify. xx xx xx RULE 8. Manner of payment . - (1) The duty on the goods removed from the factory or the warehouse during a month shall be paid by the 6th day of the following month, if the duty is paid electronically through internet banking and by the 5th day of the following month, in any other case : Provided that in case of goods removed during the month of March, the duty shall be paid by the 31st day of March : Provided further that where an assessee is eligible to avail of the exemption under a notification based on the value of clearances in a financial year, the dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternet banking : Provided that the Assistant Commissioner or the Deputy Commissioner of Central Excise, for reasons to be recorded in writing, allow an assessee payment of duty by any mode other than internet banking. (2) The duty of excise shall be deemed to have been paid for the purposes of these rules on the excisable goods removed in the manner provided under sub-rule (1) and the credit of such duty allowed, as provided by or under any rule. (3) If the assessee fails to pay the amount of duty by due date, he shall be liable to pay the outstanding amount along with interest at the rate specified by the Central Government vide notification under Section 11AA of the Act on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount. (3A) If the assessee fails to pay the duty declared as payable by him in the return within a period of one month from the due date, then the assessee is liable to pay the penalty at the rate of one per cent on such amount of the duty not paid, for each month or part thereof calculated from the due date, for the period during which such failure continues. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he remission of duty : Provided that the period specified in this sub-rule may, on sufficient cause being shown and reasons to be recorded in writing, be extended by an authority next higher than the authority before whom the application for remission of duty is pending, for a further period not exceeding six months. xx xx xx RULE 25. Confiscation and penalty . - (1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or an importer who issues an invoice on which CENVAT credit can be taken or a registered dealer, - (a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, then, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dismissed. 20. In the present case, even with regard to the grounds for rejecting the remission application, the Authorities were of the view that the loss as claimed in a very small period makes the whole issue suspicious, this view was formed treating the measurement as done by the State Excise Authorities to be the correct method for valuation completely ignoring the fact that the remission as claimed by the petitioners was over a larger period of the assessment year, thus, the same is also contrary to the law as laid down by this Court in the case of Balrampur Chini Mills Ltd. (supra), as extracted above. 21. The submission of Shri Deepak Seth, Learned Senior Counsel, that if the goods are not found in the premises, there is a presumption of clandestine removal, merits rejection inasmuch as the burden of alleging and establishing removal in contravention of Rule 8(4), is on the department; there is no presumption of removal available either under the Act or under the Rules. Thus, the demand of duty in pursuance to the impugned orders being without any allegation or establishment of clandestine removal without payment of duty cannot be accepted and to that extent the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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