Customs, Excise and Gold Tribunal - Mumbai
Shetkari Sahakari Sakhar Karkhana Ltd. vs C.C.E. on 16 April, 1999
Equivalent citations: 1999ECR286(TRI.-MUMBAI), 1999(113)ELT831(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. The appellants manufacture Sugar and Molasses. Some molasses were stored in one steel tank and three Katcha Pits. The RG 1 register showed a combined stock and not separately pitwise, and in the tank. On 15-2-1994, the total stock was 11277.300 M.Ts. For the purpose of Prohibition & Excise Department, a separate register was maintained which showed pitwise stock and also separately the stock in the steel tank. The balance shown in the steel tank Was 2523.400 M.T. Physical stock was taken of the molasses in the steel tank which came to 1408.320 MT. On the shortage of 114.08 MT. duty was demanded amounting to Rs. 2,23,016/-. The Collector having confirmed this amount, the present appeal has been filed.
2. I have heard Shri K.G. Kulkarni Consultant for the appellants and Shri K.M. Patwari for the Revenue.
3. Before the Collector at the time of personal hearing it was claimed that the shortage was an account of incorrect measurement. It was claimed that separately thereafter when the balance was taken, it was found to be correct. The Collector dismissed the submission as an after thought and relied upon findings of the panchas for sustaining the allegations. In the appeal memorandum reliance has been placed on a chart which shows the receipt and despatches of the molasses from the said steel tank with the submission that duty was paid on all the stock. This submission has no meaning because the allegation was that in the period prior to that covered under this chart, the clandestine clearances were made. In the appeal memorandum it is claimed that due to mechanical equipment malfunction, the measurement of the steel tank was wrong. This claim is also unsubstantiated.
4. There is however a very grave lacuna in the entire proceedings. The RG 1 balance showed a combined balance and therefore any shortages or excess could be determined only after Measuring stock of molasses in the steel tank as well as in the pits. If there was a shortages in one storage facility, the possibility of excess in the other storage facility could not be ruled out. Even if the register maintained for the State Excise department showed separate balance, it was necessary for the department to have taken stock or all the molasses stored before making the allegation that the stock was in excess. This is an extremely serious lacuna and any proceedings based on the faulty procedure adopted are likely to be wrong, and resulting in denial of justice. I find that in the proceedings it has come that the Katcha Pits were unauthorised but the allegations were not based on that count.
5. I find that the department had adopted an extremely wrong method of verification of the stock by concentrating on only one storage place and by omitting to determine the stock in the other three places. The calculation of shortage has to be termed as without basis. Therefore, the allegations of shortage and of loss of duty also become as without basis. On this count the order does not survive. The appeal is allowed with consequential relief.