TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 988
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....stant Commissioner, Central Excise Division, Sitapur. (ii) The petitioner claims to be a co-operative sugar mill registered under the Co-operative Societies Act and is engaged in manufacturing of sugar and molasses falling under Central Excise Tariff Heading No.17011190 & 17031000 of the Central Excise Tariff Act, 1985 and was paying the central excise duty at the time of clearance of the product. It is claimed that the factory remains under the physical control of the State Excise Authorities under the provisions of U.P. Sheera Niyantran Niyamavali, 1974. It is alleged that on 26.05.2007 at 06:00 am in the morning, there was an accident in the factory which resulted in the leakage of the tank where molasses were stored which resulted in the loss of 3240 qntls. of stored molasses. It is claimed that this fact was in the knowledge of the Deputy Excise Inspector of the State Government who is permanently posted in the mill and it is also claimed that the Inspector of Central Excise Department posted in the petitioner-factory also noticed the same accident. Sufficient evidences have been given to the effect that the facts were within the notice of the said excise authorities. (iii....
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.... Defense Reply on 19.07.2008 giving his version with regard to the accident being beyond the control of the petitioner. Alongwith the said reply, he also appended a copy of the application filed by him seeking remission in terms of Rule 21 of the Central Excise Rules. He also informed that the entire accident was well within the knowledge of the State Authorities and of the Central Excise Authorities. He also placed reliance on Circular No.261/15/82/CX-VIII dated 18.07.1983 which had allowed remission up to the maximum 2% loss due to natural causes. The petitioner also relied upon various judgments, however, the Assistant Commissioner, Central Excise Division, Sitapur vide order-in-original dated 17.09.2008 confirmed the demand of excise duty of Rs.2,95,095/alongwith interest under Section 11A/11AB of Central Excise Act and further imposed a penalty of this like amount in exercise of powers under Rule 25 of the Central Excise Rules. (vi) The order records that no application as prescribed in the format in the Trade Notice No.29/2003 dated 01.10.2003 has been given by the assessee till today. It was also recorded that no application as claimed by the petitioner was ever given to t....
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.... petitioner vide letter dated 07.07.2007 informed the department regarding loss of 1081 qntls. of brown sugar during reprocessing of 8996 qntls. of brown sugar. The petitioner was served with a demand-cum-show cause notice dated 21.11.2006 stating that on the scrutiny of the E.R.1 form for the month of November, 2005 to March, 2006, it was found that the petitioner has reprocessed 9632 qntls. of brown sugar and recovered only 8431 qntls. of white sugar, thus, there was a reprocessing loss of 1201 qntls. of brown sugar on which the petitioner neither paid any duty nor claimed any remission of duty under Rule 21 of the Central Excise Rules and thus, the petitioner was called upon to show-cause as to why central excise duty may not be levied and demanded on the 1201 qntls. of brown sugar with interest and penalty. (iv) The petitioner was also served with another demand - cum - show cause notice dated 16.11.2007 alleging that the petitioner had intimated vide letter dated 07.07.2007 that he has reprocessed 9896 qntls. of brown sugar during the year 2006-07 and had recovered 7915 qntls. of white sugar, thus, claimed reprocessing loss of 1081 qntls. and as the petitioner had neither pa....
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....r dated 07.07.2011 as well as the order-in-original dated 30.12.2009. (ii) The petitioner is a company registered under the Companies Act and manufactures sugar at District Bahraich and is duly registered under the Central Excise Act. It is claimed that for the sugar season 2005-06, the petitioner had transferred and stored the following quantities of molasses in steel tank nos.1, 2 & 3: Tank No. Quantity Stored (MT) Period of storage 1 7705.00 13.12.05 to 04.08.06 2 12877.00 12.11.05 to 28.11.06 3 2671.00 01.04.06 to 07.08.06 (iii) It is claimed that at the end of the season it was ascertained that there was a storage loss of 135.37 MT, 169.6 MT and 31.11 MT, which was approximately 1.76%, 1.53% and 1.16 % of the total quantity stored in the steel tank nos.1, 2 & 3. The petitioner filed an application on 29.11.2006 claiming remission of duty under Rule 21 of the Central Excise Rules. The petitioner was served with a show-cause notice dated 08.07.2007 proposing to reject the remission application mainly on the ground that the demand application has been filed only to enjoy the benefit of Board Circular dated 06.02.1982 without following the procedure of intimating t....
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....ndia v. Delhi Cloth and General Mills Co. Ltd. [1977 (1) ELT J 199 (SC)] to define that the article can be called goods if it is known to the market as such and can ordinarily come to the market for being brought and sold or is being capable of being sold. 7. Rule 4 & 8 of the Rules provides for manner of payment of the central excise duty which is to be paid when the goods are removed from the factory or the warehouse. Rule 4(2) provides for payment of duty in respect of molasses wherein a deeming fiction has been incorporated for payment as if the same has been produced by the procurer of the molasses. Rule 21 of the Rules specifically provides for remission of duty and confers power on the authorities to grant the remission upon them being satisfied that the goods have been lost or destroyed by natural causes or unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing at any time before removal. 8. For the purposes of the present case, Rule 4, 8 and 21 arebeing quoted hereinbelow: RULE 4. Duty payable on removal. - (1) Every person who produces or manufactures any excisable goods, or who stores such goods in a warehouse, shall pay the....
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....s eligible to avail of the exemption under a notification based on the value of clearances in a financial year, the duty on goods cleared during a quarter of the financial year shall be paid by the 6th day of the month following that quarter, if the duty is paid electronically through internet banking and in any other case, by the 5th day of the month following that quarter, except in case of goods removed during the last quarter, starting from the 1st day of January and ending on the 31st day of March, for which the duty shall be paid by the 31st day of March. Explanation-1.- For the removal of doubts, it is hereby clarified that. - (a) * * * (b) an assessee, shall be eligible, if his aggregatevalue of clearances of all excisable goods for home consumption in the preceding financial year, computed in the manner specified in the said notification, did not exceed rupees four hundred lakhs. Explanation-2. The manner of payment as specified in this proviso shall be available to the assessee for the whole of the financial year. [ * * *] Explanation. For the purposes of this rule - (a) the duty liability shall be deemed to have beendischarged only if the amount paya....
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....uring which such failure continues. Explanation. For the purposes of this sub-rule, 'month' means the period between two consecutive dates for payment of duty specified under sub-rule (1) or the first proviso to sub-rule (1), as the case may be. (4) The provisions of section 11 of the Act shall beapplicable for recovery of the duty as assessed under rule 6 and mentioned in the return filed under these rules, the interest under sub-rule (3) and penalty under sub-rule 3(A) in the same manner as they are applicable for recovery of any duty or other sums payable to Central Government. Explanation. For the purposes of this rule, the expressions 'duty' or 'duty of excise' shall also include the amount payable in terms of the CENVAT Credit Rules, 2004. RULE 21. Remission of duty. (1) Where it is shown to the satisfaction of the Principal Commissioner or Commissioner, as the case may be that goods have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal, he may remit the duty payable on such goods, subject to such conditions as may be i....
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....made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with duty may, beforeservice of notice under clause (a), pay on the basis of, - (i) his own ascertainment of such duty; or (ii) the duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under section 11AA. (2) The person who has paid the duty under clause(b) of sub-section (1), shall inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub-section in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder. (3) Where the Central Excise Officer is of theopinion that the amount paid under clause (b) of subsection (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of two years shall be computed from the date of receipt of information....
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....use (a) of sub-section (1). (10) The Central Excise Officer shall, after allowingthe concerned person an opportunity of being heard, and after considering the representation, if any, made by such person, determine the amount of duty of excise due from such person not being in excess of the amount specified in the notice. (11) The Central Excise Officer shall determine theamount of duty of excise under sub-section (10) - (a) within six months from the date of noticewhere it is possible to do so, in respect of cases falling under sub-section (1); (b) within two years from the date of notice,where it is possible to do so, in respect of cases falling under sub-section (4) (12) Where the appellate authority or tribunal orcourt modifies the amount of duty of excise determined by the Central Excise Officer under sub-section (10), then the amount of penalties and interest under this section shall stand modified accordingly, taking into account the amount of duty of excise so modified. (13) Where the amount as modified by the appellateauthority or tribunal or court is more than the amount determined under sub-section (10) by the Central Excise Officer, the time within which the....
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....eby declared that any non-levy, short-levy, non payment, short-payment or erroneous refund where no show cause notice has been issued before the date on which the Finance Bill, 2015 receives the assent of the President, shall be governed by the provisions of section 11A as amended by the Finance Act, 2015. 10. Section 11AB of the Act provides for payment of interest and Rule 25 Specifically confers power for confiscation and penalty. Rule 25 is quoted hereinbelow: RULE 25. Confiscation and penalty. - (1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or an importer who issues an invoice on which CENVAT credit can be taken or a registered dealer, - (a) removes any excisable goods in contravention ofany of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goodsproduced or manufactured or stored by him; or (c) engages in the manufacture, production orstorage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or (d) contravenes any of the provisions of these rulesor the no....
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....inality and thus, the argument of the counsel for the department on that count is not acceptable. 13. It is on record that the petitioner was served with a showcause notice under Section 11A of the Act claiming the payment of duty and interest under Section 11AB of the Act to which a Defense Reply was submitted. It was incumbent upon the Central Excise Authorities to have considered the documents submitted by the petitioner alongwith his defense reply including the fact that the sugar mill of the petitioner was under the control of the State Authorities and of the Central Excise Authorities. There is no denial of the fact that the remission claimed by the petitioner was within the prescribed limit of 2% for remission of duty. 14. It is also relevant to note that for the E.R.1 forms submitted by the petitioner for the months of May 2007, September 2007 and November 2007, the show-cause notice was served on 03.03.2008; clearly in respect of the demand for the month of May, 2007, the show-cause notice was beyond the prescribed period of limitation of six months (as existed then) without there being any specific averment to attract the proviso to Section 11A of the Act that the short....