Custom, Excise & Service Tax Tribunal
M/S. Bharat Sugar Mills Ltd vs Commissioner Of Central Excise And ... on 17 April, 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH: KOLKATA
EXCISE APPEAL NO.E/A/382/2006
(ARISING OUT OF ORDER-IN-ORIGINAL NO.5-6/MP/COMMISSIONER/2006 DATED 30.03.2006 PASSED BY COMMISSIONER OF CENTRAL EXCISE, PATNA)
FOR APPROVAL AND SIGNATURE OF
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER
DR. D.M.MISRA, HONBLE JUDICIAL MEMBER
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982 ?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not ?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities ?
M/S. BHARAT SUGAR MILLS LTD.
APPELLANT (S)
VERSUS
COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, PATNA
RESPONDENT (S)
APPEARANCE:
SHRI D.C.JHA, SALES-IN-CHARGE OF THE APPELLANT FIRM;
SHRI D.K.NATH, A.R.(DY. COMMR.) FOR THE REVENUE.
CORAM:
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER DR. D.M.MISRA, HONBLE JUDICIAL MEMBER Date of Hearing/Decision:17.04.2012 ORDER NO Per Shri S.K.Gaule Heard both sides.
2. The Appellant filed this Appeal against the Order-in-Original No.5-6/MP/COMMISSIONER/2006 dated 30.03.2006 whereby learned Commissioner has disallowed the remission of duties of Rs.2,52,821.70 for the period from 1982-83 to 1983-84.
3. Briefly stated facts of the case are that the Appellant are engaged in the manufacture of sugar molasses falling under Chapter Sub-Heading Nos. 1701.31 and 1701.39 respectively of the First Schedule of the Central Excise Tariff Act, 1985. The Appellant destroyed the molasses for the seasons - 1981-82, 1982-83 and 1983-84 involving duty of Rs.3,33,353.66. The duty was demanded from the Appellant on the ground that they had not obtained the permission from the concerned authority. A Show Cause Notice was also issued for demanding duty of Rs.4,22,800/- for the seasons, 1991-92 and 1992-93. Learned Commissioner allowed the remission for the periods - 1981-82 and 1991-92 involving duty of Rs.2,52,821.70. For the molasses pertaining to the seasons, 1982-83 and 1983-84, learned Commissioner confirmed the demand. Aggrieved by the same, the Appellant is in appeal. In her findings, learned Commissioner has also allowed remission for the period, 1992-93. However, the same does not form part of the operative portion of the Order and the Department has not challenged the same and the same is not the subject matter of the case.
4. The contention of the Appellant is that the learned Commissioner has confirmed the demand only on the ground that the quantity of 10671.23 qtls. and 3985.10 qtls. of molasses pertaining to the seasons 1982-83 & 1983-84 stored in kutcha pit were found deteriorated and ultimately got destructed. By that time, restriction came in to force vide Boards Circular No.261/15cc/4/82-CX-8 dated 22.10.82 wherein the Board had allowed to store the molasses in kutcha pit, subject to execution of a bond that in the event of loss or damage, whether by natural causes or otherwise, the assessee would pay duty on such molasses and not claim remission thereon, under Rule 49A. Accordingly, the learned Commissioner held that the assessee was responsible for any deterioration and they were required to pay duty leviable thereupon. The contention of the Appellant is that the first and second provisos of Rule 49(1) of the erstwhile CER, 1944 provided that the manufacturer shall on demand pay the duty leviable on any goods which are not accounted for in the manner specifically provided in these rules, or which are not shown to the satisfaction of the proper officer to have been lost or destroyed by natural causes or by unavoidable accident during handling or storage in such store-room or other approved premises, and provided further that the proper officer may not demand duty due on any goods claimed by the manufacturer as unfit for consumption or for marketing subject to such conditions as may be imposed by the Collector by order in writing. The contention of the Appellant is that from the perusal of the second proviso of erstwhile Rule 49 (l) of CER. 1944, there is no ambiguity that duty is not demandable on any goods which become unfit for consumption due to natural causes, as claimed by the manufacturer. There is no dispute the goods got deteriorated and became unfit for consumption due to reasons beyond the control of the appellant. The contention is that the learned Commissioner had admitted that the goods were destructed and there is no allegation against them that they had unauthorisedly removed the goods. The contention is that the restriction imposed by the Revenue is contrary to the provisions of law. This fact was also admitted by the learned Commissioner at page 16, para 25 of the Discussions and findings of the Order-in-original. It is their contention that from the above findings of the learned Commissioner it is crystal clear that the learned Commissioner was fully satisfied that the goods became unfit for consumption due to reasons beyond the control of assessee and remission of duty on such goods are also provided in the statute. He relied on the decision of the Honble Tribunal in the case of Sarjoo Sahkari Chini Mills Ltd. vs. Collector of CE. Kanpur reported in 1995 (75) ELT 336 (Tri) where it had been held that "No duty payable on goods shown to satisfaction of proper officer to have been lost or destroyed rlue to natural causes - Rules 9, 47 and 49 of Central Excise Rules,1944." The contention that even if the learned Commissioner had relied on the Boards Circular No.261/15cc/4/82-CX-8 dated 22.10.82 which provides to store the molasses in kutcha pit, subject to execution of a bond that in the event of loss or damage, whether for natural causes or otherwise, the assessee would pay duty on such molasses and not claimed remission thereon, under Rule 49A. The contention is that it is an established law that the Board cannot issue instructions against statutory provisions. When Rule 49 itself allowed the remission of duty on the goods which were deteriorated/unfit for consumption due to unavoidable reasons, the B-2 Bond executed by the Appellant having condition opposed to Central Excise Rules, is not enforceable at all. In support of their contention they have placed reliance on the following decisions of the Tribunal:-
(i) 1987(29) ELT 22 (Tri.) Shri Dudhganga-Vedganga Sahkari Sakhar Karkhana Ltd. & Twelve Other Sakhar Karkhanas and others vs. CCE, Pune & Aurangabad and other;
(ii) 1990(49) ELT 534(Tri.) Yashwant S.S.K.Ltd. vs. CCE;
(iii) 1993(68) ELT 647 (Tribunal) CCE & Cus. vs. Bhima Sahkari Sakhar Karkhana Ltd.;
(iv) 2002(149) ELT 431(Tri.-Del.) UP State Sugar Corpn. Vs. CCE, Allahabad.
5. Learned AR reiterates the findings of the learned Commissioner (Appeals).
6. We have considered the submissions and perused the record. We find that the learned Commissioner has allowed the remission of duty for the periods - 1981-82, 1991-92 and 1992-93. Learned Commissioner disallowed the remission for duty only for the periods - 1982-83 and 1983-84 and found as under:-
(b) Season 1982-83 to 1983-84: A qty. of 10671.23 qtls. And 3985.10 qtls. Respectively of molasses stored in kutcha pit were found deteriorated and ultimately got destructed. By that time restriction came into force, as such, the assessee were responsible for any deterioration and they are required to pay duty leviable thereupon. 6.1. We find that for the period, 1991-92, the Commissioner allowed the remission on the ground that the goods were burnt due to combustion. Similarly for the period, 1982-83, she had found that the goods had deteriorated and ultimately, got destructed. Therefore, there is no dispute that the goods got destructed and it stands on the same footing, for which the remission had been allowed for the period, 1992-92. Further, there is no allegation against the Appellant that they have unauthorisedly removed the molasses, which is clear from the findings of the learned Commissioner at para 25 of the impugned Order reproduced hereunder:
25. I find that the assessee have put forth their side of the story in detail and the circumstances leading to the deterioration and destruction of molasses. They have also explained the genuineness and bonafide of their claim for remission of duty and quoted various decisions to support their contention. There is no dispute that when the goods are deteriorated and become unmarketable due to reasons beyond the control of the assessee, there are provision in the statute for remission of duty and allowing its destruction. There are also decisions that when such request comes that should not be denied. lt will also be improper to summarily reject the request of the assessee for remission of duty on the ground that proper care has not been taken by the assessee to safeguard the Govt. revenue. It is also an admitted fact that the assessees stake are much more higher than the department in the excisable goods and when such goods are damaged, it is the assessee who suffer more than the department. I also find no reason to disbelieve the contention of the assessee that the goods have been deteriorated and become unmarketable since it was kept in kutcha pit for a long period of time. The chemical reports also support their contention and State Excise Authorities, who also keep control over that, has also allowed and supervised the destruction of the same. (Emphasis supplied) 6.2. In view of the above, we find that the learned Commissioners Order is self-contradictory to the extent of disallowing of remission for the years, 1982-83 and 1983-84, is not sustainable; therefore, the same is set aside and the Appeal is allowed in above terms with consequential relief, if any, as per law.
Dictated and pronounced in the open court.
Sd/- Sd/-
(D.M.MISRA) (S.K.GAULE)
JUDICIAL MEMBER TECHNICAL MEMBER
DUTTA/
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EXCISE APPEAL NO.E/A/382/2006
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