2007 (8) TMI 169 - AT - Central Excise

Tribunal allows appeal on storage regulations, remits duty for adhering until molasses' deterioration. Decision 3-8-2007.

The Tribunal allowed the appeal challenging the de novo order of adjudication, emphasizing the appellant's adherence to storage regulations until the ... Remission on molasses – Molasses when lying in ‘pucca-pit’ became unfit for marketability even before removing to ‘kucha-pit’ – Duty paid under protest – Molasses in question destroyed after permission of excise authority – Assessee is allowed for remission of duty already deposited under protest Issues:Challenge to de novo order of adjudication rejecting remission of duty and claim for refund of Central Excise duty paid on molasses.Analysis:1. Challenge to De Novo Order of Adjudication:The appellant contested the de novo order of adjudication dated 7-8-2006, which rejected their application for remission of duty on 17,600.70 qtls. of molasses and refund of Rs. 2,21,763.82 paid as Central Excise duty. The impugned order highlighted the transfer of molasses from pucca pit to kutcha pit following Circulars dated 22-10-1982 and 1-8-1988. The appellant sought permission for destruction of deteriorated molasses in 1991, leading to a series of communications with Central Excise Authorities. The destruction was eventually carried out with supervision from State Excise Authority, and the appellant requested remission of duty and refund. The Competent Authority's decision communicated in 1993 prompted the appellant to seek redressal, leading to the present appeal against the de novo order.2. Arguments by Appellant and Revenue:The appellant argued that the molasses' deterioration in the pucca pit necessitated transfer to the kutcha pit, leading to duty payment under protest. They cited precedents and contended that Circular No. 35/88-CX.8 did not bar remission of duty. In contrast, the Revenue relied on the circular to deny remission, highlighting the duty liability upon molasses' production and payment. The appellant's counsel emphasized the need for remission due to the molasses' condition and the circular's timing.3. Tribunal's Decision and Legal Analysis:The Tribunal examined Circular No. 35/88-CX.8's withdrawal of the 1982 circular permitting molasses storage in kutcha pits. It referenced a Bombay Tribunal decision supporting remission for deteriorated molasses. The High Court of Patna's ruling in a similar case emphasized duty payment upon molasses production. The Chennai Tribunal's judgment favored the appellant, considering the circumstances and Circular 35/88. The Tribunal noted the appellant's compliance with storage regulations until the molasses' deterioration, justifying remission of duty paid under protest.4. Conclusion:The Tribunal allowed the appeal, emphasizing the appellant's adherence to storage regulations until the molasses' deterioration, justifying remission of duty. The decision was pronounced on 3-8-2007, in favor of the appellant challenging the de novo order of adjudication.This detailed analysis outlines the legal complexities surrounding the challenge to the de novo order of adjudication, emphasizing the appellant's justifications for remission of duty and refund of Central Excise duty on deteriorated molasses stored in compliance with regulations.