M/S.Dalmia Chini Mills vs Cce, Ltu, New Delhi

[Arising out of the OIA No.LTU/CE/Appeal/57/2012 dt.18.10.12 passed by the CCE (Appeals), New Delhi)

Date of Hearing/Decision: 23.2.2015

For Approval & signature:

Honble Mr.Ashok Jindal, Member (Judicial)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? Yes

M/s.Dalmia Chini Mills Appellant

Vs.

CCE, LTU, New Delhi Respondent

Appearance

Shri Shekhar Vyas, Advocate- for the appellant

Shri R.k.Mishra, A.R. - for the respondent

CORAM: Honble Mr.Ashok Jindal, Member (Judicial)

FINAL ORDER NO. 50566/2015

Per Ashok Jindal :

The appellant is in appeal against the impugned order for demanding duty alongwith interest and imposing of penalty on them.

2. The brief facts of the case are that the appellant is manufacturing sugar and molasses. After completion of crushing season, certain quantity of molasses and brown sugar (semi finished) remained in the machine which was recorded in the RG-1 register and intimated to the department. Thereafter in the next season when crushing started the quantity remained in semi finished form in the earlier season reprocessed and quantity of finished brown sugar obtained. Shortage of brown sugar obtained by the appellant. In these set of facts duty is demanded on shortage of finished goods recorded from the unprocessed goods for the last season. It was alleged that as the appellant has not filed any remission application for condonation of such loss/shortages, they have wilfully suppressed the quantity and shortage wilfully not accounted the same in the books of accounts. Consequently the show cause notice was issued and duty was demanded on the shortage alongwith interest and penalty was also imposed. Aggrieved with the said order, the appellant is before me.

3. Ld.Counsel for the appellant submits that the goods were in semi finished form therefore the provisions of Rule 21 of Central Excise Rules, 2002 are not applicable to the facts of this case and the same is applicable to finished sugar. He submits that since semi finished sugar for the earlier period 2003-2004 was 4905 Qtls. was reprocessed during the season 2004-05, no duty can be confirmed against the appellant on shortage of goods during reprocessing semi finished sugar. Therefore, the impugned order is required to be set aside.

4. On the other hand, learned AR for the Revenue supported the impugned order.

5. Heard the parties and considered the submissions.

6. In this case, it is admitted fact that the goods remained semi finished in the earlier crushing season and provision of Rule 21 of Central Excise Rules, 2002 are applicable to finished sugar. Therefore, the provisions of Rule 21 are not applicable to the facts of the present case. Further, I find that the appellants own case this Tribunal vide Final No.56640/2013 dt.4.6.2013 has held as under:

6. The loss is in respect of sugar season 2007-2008. There is no allegation that the quantity which is claimed as lost have been clandestinely removed. According to the appellant this loss was due to evaporation handling over a period of time and this is evident from the fact that the loss is only 0.021% of the total quantity of molasses produced during 2007-2008 sugar season. The loss being due to natural causes should have been condoned specifically in view of the fact that there is not even allegation that the quantity claimed by the appellant as loss has been illicitly removed. Therefore, I am of the view that the judgement of Allahabad High Court in the case of Kesar Enterprises Ltd. (Sugar Div.) vs. CCE, Meerut-II (supra) is not applicable to the facts of this case. Looking to the facts and circumstances of teh case, it is the judgement of the Tribunal in the case of Mawana Sugar Works vs. CCE, Meerut-I reported in 2008 (227) ELT 438(Tri.-Del.), which would be applicable wherein it was held that loss on account of natural causes upto 2% is condonable. The impugned order is not sustainable. The same is set aside. The appeal is allowed.

7. Following the precedent decision of this Tribunal in the appellants own case, I hold that the appellant is not required to pay duty on shortage as alleged in the impugned order. Consequently, the impugned order is set aside and the appeal is allowed with consequential relief, if any.

(Dictated & pronounced in the open court)

(Ashok Jindal)

Member (Judicial)

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