Court emphasizes mandatory procedure for remission application filing under Rule 21, quashes Tribunal decision.

The High Court held that following the procedure under Rule 21 for remission is mandatory, even if the loss is within the permissible limit. The Court emphasized strict adherence to statutory requirements and quashed the Tribunal's decision, remanding the matter for verification of the remission application filing. The Court clarified the Tribunal's authority for factual findings and allowed the appeal for statistical purposes.

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Issues:
1. Whether remission of duty on storage loss of molasses can be allowed without filing a remission application under Rule 21 of Central Excise Rules, 2002Rs.

Analysis:
The case involved a central excise appeal where the Joint Commissioner held the assessee liable for payment under Section 11-A of the Central Excise Act, 1944 for the loss of molasses. The Commissioner (Appeals) rejected the appeal as the assessee failed to produce any document showing an application for remission under Rule 21 of the Central Excise Rules 2002. The Tribunal later allowed the appeal, stating that the loss was within the condonable limit of 2% as per circulars issued by the Additional Collector. The Tribunal set aside the orders of the assessing and appellate authorities based on this finding.

The department contended that even if the loss is within the permissible limit, an application under Rule 21 of the Rules is mandatory for remission of excise duty on lost goods. Since no application was filed, the Tribunal's decision to quash the penalty was unjustified. The assessee argued that the loss was within the permissible limit and referred to circulars supporting their position. They also cited a judgment in a similar case to support their argument.

The High Court disagreed with the Tribunal's reasoning and emphasized that following the procedure under Rule 21 for remission is necessary, even if the loss is within the permissible limit. It cited legal principles stating that statutory requirements must be followed strictly. The Court quashed the Tribunal's order and remanded the matter back to the Tribunal for a fresh decision after verifying if the assessee had filed a remission application. The Court clarified that the Tribunal is the final authority for factual findings, and the appeal was allowed for statistical purposes.

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