Indian Kanoon - Search engine for Indian Law

31. ED(BOM)187/85 is an appeal by Department, namely, Collector of Central Excise and Customs, Aurangabad, directed against the order-in-appeal No. M-410/AUR-44/85, dated 26.7.85 passed by Collector of C.E. (Appeals), Bombay,, by which he set aside the order passed by Shri C.D. Thakare, Assistant Collector of Central Excise and Customs, Nanded. In his order, while stating the facts of the case the Assistant Collector has stated "the assessee M/s. Jai Bhavani Sahakari Sakhar Karkhana Ltd., have come forward with their application No. MFG/I/83, dated 19.12.83 addressed to the Superintendent, Central Excise, Jalna Ranga, requesting therein for permission to allow them to destroy total quantity of 7132.844 M/Tons of Molasses ... lying in their kaccha pit Nos. 1 and 2 as due to natural causes as the same is in deteriorated condition and thus unfit for distillation". The Assistant Collector also recorded a finding that the damage of Molasses stored in kaccha pit Nos. 1 and 2 could have been avoided and goods could not have been damaged but for human error and not because of natural causes. The Collector (Appeals), however, set aside the finding of the Assistant Collector and held that the deterioration/damage caused to Molasses were due to natural causes, beyond the control of the appellants herein. He further held that the remission of duty claimed in the case was within the scheme of Central Excise Act and Rules. The assessee was, therefore, entitled to remission under Section 5 read with Rule 49.

58. We have in the course of this order referred to the facts narrated by the Assistant Collector in his order which is the subject-matter of appeal ED(BOM)187/85 filed by the Collector. The factory in question had sought permission to allow them to destroy the Molasses lying in their kaccha pit Nos. 1 and 2 as the same has been deteriorated due to natural causes. The Assistant Collector's finding was that the damage of Molasses stored in kaccha pit Nos. 1 and 2 could have been avoided and goods could not have been damaged but for human error. This finding, on the facts established in this case, appears incorrect. As has been observed by us earlier, while granting permission to store the Molasses in kaccha pits the only condition imposed was to take a bond undertaking not to claim remission of duty even if the Molasses get destroyed or damaged due to natural causes. No other condition had been imposed. There was no condition as to the duration of storage or the quantum of Molasses to be stored or other precautions to be taken. The sugar factory was able to establish by documentary evidence of unimpeccable character the Molasses stored in kaccha pits have become unfit for distillation due to long storage. In the circumstances the finding by the Assistant Collector that the loss was not due to natural causes but due to human error cannot be accepted. Shri Pattekar had contended that the Collector (Appeals) who had set aside the order of the Assistant Collector had not considered the effect of B-2 bond executed by the sugar factory. It is true that in the order of the Collector (Appeals) there is no reference to B-2 bond. But then, as has been observed earlier, if the Department desire to enforce the B-2 bond the proper forum is Civil Court and not the adjudicating authority or the Tribunal.