TaxTMI 
TaxTMI 
2008 (9) TMI 365
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.... over India to sell a specified quantity of sugar to the Government out of "Free Sale" portion of the sugar production of 1996-97 as levy sugar on loan basis. In pursuance to this order, Ghughli Distt. Maharaj Ganj and Deoria units of the Appellant company cleared a specified quantity of sugar out of 'free sale' portion as 'levy sugar' during Dec. '97 - Jan. '98 and Oct. '97 - Dec. '97 periods respectively on payment of duty at the rate applicable to levy sugar. The Central Govt. vide letter dt. 13-10-98 converted the above mentioned purchase of sugar out of free sale sugar quota as levy sugar on loan basis into 'purchase from free sale quota' and sugar factories were paid the differential amount i.e. the difference between the price of the....
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....s of the Commissioner (Appeals) that these appeals have been filed. 2. Heard both the sides. 2.1 Shri Atul Gupta, Co. Secy., on behalf of the Appellant pleaded that in view of the Tribunal's judgment in case of CCE, Meerut v. M/s. Kesar Enterprises, where an identical issue was involved, (Order No. 465/08, dt. 11-7-08) no duty is recoverable, that in this case there was no suppression of any facts on the part of the Appellant, that initially a portion of the free sale had been cleared as levy sugar on loan basis as per the directions of the Govt. of India and at that time, duty at the rate applicable for levy sugar was paid, that subsequently when the loan was converted into sale, the Govt. paid the differential amount to the sugar units ....
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....n loan basis into sale out of free sale sugar quota and paid the differential amount to the sugar factories and besides this, also promised to reimburse the Central Excise Duty on production of proof of payment of the same to Central Excise Department. Since on conversion of sugar purchased from the sugar mills as 'levy sugar on loan basis' into purchase of sugar out of free sale quota and payment of the differential amount to the sugar mills, the sugar cleared by the sugar factories of the Appellant Company became free sale sugar, classifiable under heading 1701.39, duty was payable on the same at the rate applicable to the free sale sugar. We do not accept the Appellant's contention that change in price of the sugar subsequent to the clea....