Customs, Excise and Gold Tribunal - Mumbai
Purna Sahakari Sakhar Karkhana Ltd. vs C.C.E. on 31 October, 1996
Equivalent citations: 1998(100)ELT513(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The appellant is a manufacturer of sugar. Molasses, one of the by products, arising in such manufacture was stored open in pits dug into earth. This was necessitated by the fact that owing to unusually high production of sugar the existing storage tanks in the appellant's factory were insufficient to hold the entire stock of molasses which had been produced and was pending clearance. Molasses were stored in the earthen pits after getting permission from the department which made a condition that the appellant would not claim remission of duty on molasses stored in katcha pits. When subsequent testing of the molasses proved it to be unfit for consumption, the appellant asked for remission of duty payable on such molasses. This was refused by the Assistant Collector. The Collector (Appeals) directed the matter to be placed before the Collector. The Collector also refused remission and confirmed the eligibility to duty of the molasses. Hence this appeal.
2. The reasons which the Collector has cited for his conclusion are that the appellant had accepted the condition attached to the permission for storage that no remission of duty would be granted that storage in proper tanks or in a pits properly cemented would have prevented the loss which is claimed to be due to rain, evaporation etc. The Collector has also gone by the fact that the appellant did not bring the deterioration of the molasses to the notice of the department. These points were reiterated by the Departmental Representative.
3. The fact that the department laid down the condition that remission of duty on all molasses would not be granted would not disentitled the appellant to such remission, if it was available to it in law. The authorities by an executive order cannot curtail the right available to an assessee. Again, the assessee cannot estopped from claiming the relief available within the law merely because it acted on the permission latter and stored the molasses in katcha pits.
4. It is not possible for me to agree that rain, evaporation, percolation etc. which resulted in the deterioration of the molasses are not natural causes. The Collector in fact does not say that these are not natural causes, but says that deterioration due to these causes could have been prevented by taking proper precaution. That may be correct, but Rule 49 provides for grant of remission to goods which are lost or destroyed by natural causes and does not limit grant of remission to cases where the loss could have been prevented. On this point too, the appellant has a strong case, since the release of molasses from the factory of production is controlled by the State Government, and it has been contended that it was for this reason that the molasses could not be cleared and had to be kept for three years. The decision of this Tribunal in C.C.E. v. Dhampur Sugar Mills -1986 (24) E.L.T. 28A (Tribunal) has to be distinguished because of the difference in facts. In that case, the loss appears to have been taken place because of careless handling due to overflow. Further in its later decision this Tribunal in the case of Shri Dudhganga Vedganga Sahakari Sakhar Karkhana Ltd. and Ors. v. C.C.E. -1987 (29) E.L.T. 22 (Tribunal) has held that rain entering in the sides of an earthen pit etc. are natural causes in that they were not caused by man. It is also to be noted that the goods had been stored in pits after receiving permission to do so from the department. This would be the answer to the Collector's view that the loss could have been prevented. If the department felt that the storage was such that the goods would be deteriorated it need not have given the permission. The appellant was therefore rightly entitled to remission.
5. Appeal allowed. Impugned order set aside.