2011 (6) TMI 433

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....asses pertaining to sugar season 2004-2005. The Assistant Commissioner Central Excise Division, Faizabad issued show cause notice dated 2.11.2006 proposing rejection of remission and demanding duty of Rs.7,60,341/- along with interest and proposing penalty under Section 11AC read with Rule 25 of Central Excise Rules. It was also alleged in the show cause notice that the appellants have failed to intimate the jurisdictional Central Excise officer within the prescribed time limit about the fact of shortage of molasses to avoid physical verification. The appellants vide their letter dated 28.12.06 contested the demand and in particular submitted that they had filed intimation within the time limit prescribed. The Commissioner did not accept re....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ncrease in volume at the time of storage show higher weight. He also submits that the assessee has not produced any evidence to show that the actual weight of molasses stored at the time of storage was less than the recorded weight. He also submits that 2% of storage loss of molasses is upper limit for the purpose of remission of duty and the same cannot be claimed as a matter of right. 5.2 In this regard, he relies on the decision of the Hon'ble High Court of Allahabad in the case of CCE, Allahabad vs. Balrampur Chini Mills Ltd. reported as [2008 (223) ELT 34 (All) wherein it has been held that the circular cannot be interpreted to mean that every producer as a matter of right be entitled to 2% of annual production as storage loss irrespe....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e of whether the molasses were stored in Katcha pits or pucca pits. Apparently the Board has taken into consideration the ground reality before issuing such circulars. The storage loss claim relates to the period from May, 2005 to November, 2005 and the bulk of the period was summer months. The decision of the Hon'ble High Court in the case of Kesar Enterprises Ltd. vs. CCE, Meerut II reported as [2008 (221) ELT 329 (All) relate to losses for the period between 28.10.98 to 19.1.99. Hon'ble High Court has specifically noted that period being winter season, such large amount of shortage could neither be justified by foam formation due to natural heating nor evaporation to any appreciable extent. In the said case Hon'ble High Court had dealt w....