Customs, Excise and Gold Tribunal - Mumbai
New Phaltan Sugar Works Ltd. vs Commr. Of Cus. & C. Ex., Pune-Ii on 22 January, 2002
Equivalent citations: 2002(141)ELT720(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (J)
1. On hearing both sides the prayer for waiver of pre-deposit of duty of Rs. 1,66,234/- was granted and the appeal was taken up for disposal.
2. The appellant manufactures sugar and molasses. A quantity of 1278.73 MTs of molasses stored in a pucca pit attained spontaneous combustion on 9-6-1995. The Central and State excise authorities were immediately informed and measures were taken to put the fire out. Authorities of both Departments visited the scene, samples of the molasses were examined by the Dy. Chief Chemist who certified the molasses as unfit for human consumption. On 19-6-1995 the assessees sought remission of duty and also for permission to remove the burned molasses. On 17-7-1995 show cause notice was issued demanding duty as shown above. The demand was confirmed by the Assistant Commissioner who also imposed a penalty of Rs. 5 lakhs. The Commissioner (Appeals) remitted the penalty but upheld the confirmation of duty. Hence the present appeal.
3. Spontaneous combustion built up due to latent heat in molasses stored is a common phenomenon aggravated by high ambient temperatures. The jurisdictional authorities would have been well advised to process the claim for remission of the duty since the fact that the burned molasses was unfit for human consumption was certified by their own authorities. The Assistant Commissioner observed that the assessees had failed to follow the procedure laid down under Rule 49 and Rule 147. He also held that the assessees had failed to take proper precautions. Holding this view he confirmed the duty. Commissioner (Appeals) also followed the same line of reasoning.
4. I find the attitude of both the authorities unreasonable. It does not give any benefit or pleasure to the manufacturer to see his products destroyed. Combustion in molasses is a very serious affair controlling which is almost impossible. The rules do not prescribe any procedure for the assessees to follow to ensure that their goods are not destroyed.
5. In the following cases in similar circumstances the Tribunal had allowed remission of duty :
(i) Shankar Sugar Mills v. CCE, Allahabad -1994 (71) E.L.T. 753 [ii) Saraya Sugar Mills Ltd. v. CCE, Allahabad -1997 (93) E.L.T. 264
6. Following the case law the demand for duty is set aside.