2013 (12) TMI 276 - AT - Central Excise

CESTAT grants relief to sugar manufacturers on duty remission for molasses storage losses

The Appellate Tribunal CESTAT NEW DELHI allowed the appeals of the appellants, who were engaged in sugar and molasses manufacturing, regarding the ... Remission of duty of molasses stored in steel tanks – Held that:- Losses is below 2% and the reasons stand advanced by the assessee are on account of evaporation, handling and chemical reaction etc - The Central Board of Excise and Customs vide its letter No. 261/CC/1/80-CX-B dated 6.2.1982 and instruction No. 74/1989 dated 1.6.89 of Meerut Collectorate, storage losses of molasses upto 2% are allowable - The Commissioner has not advanced any reasons for not following the said instructions - there is no allegation that losses occur due to clandestine removal of molasses – order set aside – Decided in favour of Assessee. Issues:Dispute over remission of duty for molasses stored in steel tanks due to losses below 2% and reasons advanced by the assessee.Analysis:The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Ms. Archana Wadhwa, pertains to three appeals concerning the remission of duty for molasses stored in steel tanks by the appellants engaged in sugar and molasses manufacturing. The dispute revolves around the rejection of applications by lower authorities citing failure to provide loss intimation within 24 hours and disputing the reasons for losses as not being natural causes.Upon review, it was found that the losses in all cases were below 2%, attributed by the assessee to factors like evaporation, handling, and chemical reactions. The Central Board of Excise and Customs had issued instructions allowing storage losses of molasses up to 2%, as evidenced by specific letters and instructions. The Commissioner did not provide any justification for disregarding these instructions. Importantly, there was no suggestion of losses due to clandestine removal of molasses.In light of the above, the Tribunal, without delving into detailed reasoning, considered the precedent decisions cited by the appellant and the Board's instructions. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief granted to the appellant. The judgment emphasizes adherence to established instructions and precedents in determining the allowance of storage losses for molasses, ultimately ruling in favor of the appellants based on the provided justifications and regulatory guidelines.