ORDER
R.K. Abichandani, J. (President)
1. The appellant has challenged the order of the Commissioner dated 19.07.2005 rejecting its remission claim in respect of 1741.80 qtls. molasses for the season of 2000-01 made by their letter dated 30.11.2001.
2. After hearing both sides and going through the record, it appears that the shortage found was less than 2% of the total quantity. The shortage is worked out on the basis of the material on record at 0.72%. The Commissioner has rejected the remission claim on the ground that, the appellant had not taken adequate precaution to safeguard the goods. He observed that, the appellant did not show that the loss that occurred was unavoidable and was not caused due to carelessness on their part. He further relied upon the Trade Notice No. 206/84 dated 01.12.1984 of the Meerut Commissionerate for holding that, there was failure on the part of the appellant to comply with the procedure/conditions laid down therein.
3. Both the above grounds given by the Commissioner for rejecting the appellant’s claim were negatived by the Tribunal by its decision, in the case of Ramala Sehkari Chini Mills Ltd. v. CCE, Meerut-I, reported in 2007 (213) ELT 361, against the Revenue. The reliance by the Commissioner on the Trade Notice dated 01.12.1984 was held to be misconceived for the following reasons :
The Trade Notice No. 206/84 dated 01.12.1984, was issued by the North UP. Collectorate, Meerut, in the context of Rule 49 of the Rules of 1944, provided in paragraph 3 thereof that, in order to avail of the provisions of the remission of duty, the procedure indicated therein should be followed. As per that procedure, the first information regarding loss or destruction of excisable goods by natural causes or accident such as flood, cyclone, fire etc. was to be sent within 24 hours of the occurrence of the accident to the Range Superintendent concerned. It was indicated that any delay in furnishing this information by the owner of the goods may result in refusal to write-off duty on such losses. It is obvious that any such procedural requirement of informing the Collectorate about the accident resulting in loss/destruction of goods within 24 hours would have been issued for administrative convenience and was relatable to the occurrences at a point of time from which the period of 24 hours could be computed. This is clear from the nature of causes mentioned in the Trade Notice namely, flood, cyclone, fire which would be causes from the point of occurrence of which 24 hours could be computed. In the losses such as, due to seepage, evaporation or other such causes in the stored goods. It may not be possible to detect the loss at the time when it occurred as it may be possible in cases of losses due to flood, fire etc. Moreover, such a procedural requirement provided by a Trade Notice cannot override or delimit the operation of the statutory rules. Rule 21 of the said rules does not prescribe such narrow time limit for intimation of the losses.
4. The Tribunal also held that, when storage loss of molasses was undisputedly within the permissible limit of condonable 2%, there was no reason for the Commissioner for not giving the benefit of this Circular dated 18th July, 1983 issued by the Board which specifically applied to storage of molasses in steel tanks. In this context, the Tribunal held, in paragraph 7.2 of the judgment, as under:
The Circular letter F.No. 261/15/82/CX-8 dated 18th July, 1983 issued by the Board on condonable losses of molasses, in terms, provided that the instructions permitting condonable loss upto 2% was confined to storage losses observed in steel tanks/pakka pits. An identical issue that arose before the Tribunal in J.K. Sugar Limited v. CCE, Meerut-II, , was decided in favour of the applicant by holding in the context of Rule 21 that, though Rule 21 did not specifically mention ‘handling’ the reference in the rule to “unavoidable accident at any time before removal” would cover handling losses also. Therefore, the losses that had occurred due to storage as well as due to leakage while transferring the molasses to the tankers for transport within the premises which would be “handling” losses, were both covered for the purpose of deciding the remission of duty upto the condonable limit of 2% as envisaged in the Circular letter of the Board.
5. Even earlier, the Tribunal in the case of Seksaria Biswan Sugar Factory (P) Ltd. v. Commissioner of Central Excise, Lucknow, , held in paragraph 6 of the judgment that, Board had given clear cut direction to all field formations that storage loss upto 2% should be condoned. It was observed that, the Tribunal, in various decisions, has been consistently taking the view that the storage losses upto 2% should be condoned.
6. For the foregoing reasons, the impugned order of the Commissioner (Appeals), rejecting the remission claim of the appellant, cannot be sustained and is hereby set-aside and the remission claim is ordered to be accepted. The appeal is accordingly allowed.
(Dictated and pronounced in the open Court on the 8TH day of August, 2007)
