M/S Indian Potash Ltd vs C.C.E. & St, Meerut I

(Arising out of the Order-in-Appeal No. 223-CE/MRT-I/2006 dated 17/10/2006 passed by the Commissioner (Appeals), Central Excise, Meerut-I).

For approval and signature:

Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s Indian Potash Ltd. . Appellant

vs.

C.C.E. & ST, Meerut  I . Respondent

Appearance:

Shri Mayank Garg (Advocate) - for the appellant

Shri R.K. Grover (A.R.) for the Respondent/Revenue

Coram: Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

Final Order No. 52210/2015 dated 10/07/2015

Per. H.K. Thakur :-

This appeal has been filed by the appellant against OIA No. 223-CE/MRT-I/2006 dated 17/10/2006 under which OIO dated 31/10/2005, passed by the Adjudicating Authority, has been upheld. A demand of Rs. 83,350/- was confirmed against the appellant by the Adjudicating Authority on the grounds that duty liability, with respect to molasses destroyed in the factory, was recoverable.

2. Shri Mayank Garg (Advocate), appearing on behalf of the appellant argued that appellant was separately seeking remission of duty on the molasses destroyed in the accident. That matter ultimately reached CESTAT where as per final order No. A/742/2012-EX (BR) dated 25/6/12 in appeal No. 2477/2005 CESTAT allowed the remission on the same goods destroyed in the accident.

3. Shri R.K. Grover (AR) appearing on behalf of the Revenue argued that the remission allowed to the appellant as per order dated 25/6/12 of CESTAT, New Delhi pertains to the same quantity of molasses destroyed for which demand has been confirmed by the lower authorities.

4. Heard both sides and perused the case records. Appellant is a State Controlled manufacturing unit engaged in the manufacture of sugar with molasses as its by-product. While deciding the remission of molasses destroyed in leakage CESTAT in order dated 25/6/12 has made following observations :-

8. It is? undisputed that after the accident, was reported to the Department, the officials from the Commissionerate visited the factory of the appellant. There is nothing on the record that the excise team on inspection found some mischief or reported that the accident was not genuine. Thus, there is no dispute regarding the loss of molasses. As regards, the plea that the accident was avoidable it is sufficed to say that every accident is on account of lack of precaution on the part of the personnel responsible for avoiding such incident. Nobody deliberately would indulge in an exercise which may result in huge loss. Therefore, we are of the view that interpreting Rule 21 of the Central Excise Rules, the authorities are required to be liberal otherwise restrictive construction to Rule 21 would make it inoperable and redundant. In our aforesaid view, we are supported by the judgment of Honble Rajasthan High Court in the matter of Union of India v. Hindustan Zinc Ltd. (supra).

9. This is? therefore a fit case in which the Commissioner ought to have allowed the remission of excise duty particularly when there is no evidence to show any mala fide intention to evade the excise duty. Thus, we find it difficult to sustain the impugned order. Appeal is accepted. The impugned order is set aside and remission sought by the appellant is allowed.

5. In view of the above order passed by CESTAT, once remission on the same goods was allowed, there can be no case for confirmation of the demand on the quantity destroyed for which remission has already been granted. Accordingly, appeal filed by the appellant is allowed.

(Operative part of the order pronounced in the open court.)

andl

(Justice G. Raghuram)

President

(H.K. Thakur)

Technical Member

PK

??

??

??

??

3