Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S.Pepsico India Holding Pvt.Ltd on 21 December, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No. E/300/09
(Arising out of Order-in-Appeal No.01-02/Kol-VII/2009 dated 02.02.2009 passed by the Commissioner(Appeal-I) of Central Excise, Kolkata.)
Commissioner of Central Excise, Kolkata-VII
Applicant (s)/Appellant (s)
Vs.
M/s.Pepsico India Holding Pvt.Ltd.
Respondent (s)
Appearance:
Shri A.Roy, Supdt.(AR) for the Revenue Shri Ravi Raghavan, Advocate for the Respondent CORAM:
Honble Shri P.K.Choudhary, Member(Judicial) Date of Hearing/Decision :- 21.12.2016 ORDER NO.FO/A/76439/2016 Per Shri P.K.Choudhary.
Brief facts of the case are that M/s.Pepsico India Holding Pvt.Ltd. are manufacturers of Aerated Water, Soda Water and Fruit Pulp. The Appellant declared in their ER-1 returns that 1,43,757 bottles and 5150 cases of Aerated Water of various brands, Soda and Slice (soft drinks), stated to be Godown breakage, which were cleared without payment of excise duty amounting to Rs.3,78,143/- on the ground that the aforesaid quantities of bottles were broken/leaked, burst out at the time of storage because of high pressure of Carbon Di-Oxide gas rendering the said bottles unfit for human consumption.
2. It is the case of the Revenue that the Appellants were not able to justify the quantity of damaged bottles either by way of physical verification by the Central Excise officers or by producing suitable documents in this regard. The Revenue in their Grounds of Appeal inter alia has stated that 3. The decision has been completely made on the basis of the decision of Honble CESTAT vide Order No. A-866-867/Kol/08 dated 04.09.08, which itself has not reached finality, thus making the Order in Appeal bad in law and biased. While disposing the appeal, the Honble CESTAT did not consider the fact that the appellant did not keep the broken bottles for inspection and since the breakage claimed was unsubstantiated. Further, while passing the order, Honble CESTAT did not consider the following points :-
(i) Boards Circular No. ID/3/70-CX 8 Dated 08.09.71 states that 0.5% breakages may be allowed to be written off for breakages of bottles occurring place in bonded store room and at the time of clearance. But M/s Pepsico India Holding Pvt. Ltd. have themselves claimed that the bottles on which remission were claimed were damaged due to leak or burst. Thus, no breakage in handling occurred; hence the tolerance limit of 0.5% did not apply in the present instant. This is further fortified by the fact that in their order Honble CESTAT have recorded the contention of the Ld. JDR that the appellants are using plastic bottles instead of glass bottles.
(ii) Boards Circular No. ID/3/70-CX 8 dated 08.09.71 further states that Care should be taken to see that this limit is not acted upon as a matter of course, and each individual case is investigated by the Range Staff . Thus mere declaration by the appellant that there breakage loss is below 0.5% does not give them the automatic right to get remission. They are required by Rule, to satisfy the Central Excise authorities about the actual loss. No arrangement for verification was ever made by the assessee and on the contrary they have claimed repeatedly that the breakage loss cannot be physically produced for inspection. Thus the condition of the circular is not fulfilled in the present case and what effectively transpires is that the assessee is claiming the duty remission as a matter of right without any supporting evidence/ verification etc.
(iii) Boards clarificatory circular no. 261/ID/1/75-8 Dated 17.9.75 also reiterating the above points.
(iv) Honble CESTAT passed the order giving benefit of doubt to the appellants ignoring the abovementioned guidelines of the Board.
(v) In the instant case, breakage etc, occurred after the goods were manufactured and as such the goods were liable to duty until anything contrary was shown to the satisfaction of the proper officer in terms of Rule 21 ibid. Rule 21 of Central Excise Rules, 2002 empowers the proper Central Excise authority to remit duty payable on goods that have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing at any time before removal subject to such condition as may be imposed by the proper Central Excise officer by order in writing. The said rule does not fix any percentage of breakage for which duty may be taken to be remitted automatically. Further, quantum of duty involved can never be a ground for remission of duty until and unless it is backed by proper statute. Finally, mere intimation to the Excise Department does not confer any right on the subject assessee to clear dutiable goods without payment of duty in the scheme of Self Assessment Procedure.
4. The impugned order dated 04.09.08 of the Honble Tribunal has no general application, as it has not laid down any law while granting relief to the appellant without taking into account hard facts such as non-production of so called broken bottles by the assessee and the resultant lack of verification of so called broken/damaged bottles, as envisaged in the Boards Circular no. ID/3/70-CX 8 dated 08.09.71. Moreover, the period covered by the said CESTAT order is different from the instant cases.
3. Ld.Counsel appearing on behalf of the Respondent submitted that the Appeal filed by the Revenue has been dismissed by the Honble High Court in their own case as reported in 2013 (287) ELT A-129(Cal.).
4. Heard both sides and perused the appeal records.
5. Para 6 & 7 of the impugned order are reproduced below for ready reference:-
6. In view of the above, it appears that the issue has not attained finality, but as the matter has already been decided by the Honble CESTAT, Kolkata and the matter is presently before the Honble High Court, I am of the considered opinion that the issue is not open for me to decide. However, since the last operative order from the Honble CESTAT is in favour of the appellants, it would be only fair to stay the recovery of the levies imposed by the two impugned orders.
7. Accordingly, I order that the recovery of duties, penalties and interest demanded/imposed in the two aforesaid orders passed by the Assistant Commissioner, shall remain stayed until the final settlement of the matter. These two appeals are ordered to be transferred to the call book, to be recalled after the matter is decided finally The department is requested to keep this office informed regarding further developments in the matter, so that these two appeals could be processed further.
6. In view of the above observations of the lower appellate authority, since he had not decided the appeals and had ordered for transfer of the appeals to the call book to be recalled after the matter is decided finally in view of the pendency of the departments appeal before the Honble High Court at that time. Today, when the matter was called, Ld.Counsel appearing on behalf of the Respondent submitted that the said Appeal of the department has already been dismissed by the Honble High Court in their own case as reported in 2013 (287) ELT A-129(Cal.) (supra). Keeping in view the overall facts and circumstances of the case, as narrated above, this Appeal is also liable to be dismissed. Accordingly the Appeal is dismissed as not maintainable.
(Operative part of the order was pronounced in the open court.)
SD/
(P.K.CHOUDHARY) MEMBER(JUDICIAL)
sm
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Appeal No.E/300/09