2004 (7) TMI 125 - AT - Central Excise

Summary

Issues: Duty liability on molasses found short in storage tanks.

In this case, the issue revolved around the duty liability of the appellants concerning the shortage of 2850.25 Otls. of molasses as storage loss in their RT-12 return for the month of July, 2000. The department alleged clandestine removal of the molasses, but failed to provide evidence to support their claim. The Commissioner (Appeals) acknowledged that the shortage was due to storage loss, referencing CBEC's Circular No. 261/15/82-CX. 8, which allowed condonation of duty on lost molasses if the loss did not exceed 2% of the total stored. As the loss reported was below 2%, the appellants were entitled to duty condonation as per the circular. The argument that the appellants needed to apply for condonation separately under Rule 147 was rejected, as it did not apply to their case. The Commissioner (Appeals) was obligated to set aside the duty demand since the loss was within the limit specified by the Board, and no duty could be legally confirmed against the appellants based on the facts presented. Consequently, the impugned order was set aside, and the appeal of the appellants was allowed with any consequential relief permissible under the law.