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2022 (8) TMI 988 - HC - Central ExciseRemission of duty - leakage of the tank where molasses were stored - remission rejected on the ground that the application was not filed within the prescribed period of 24 hours as prescribed in Trade Notice No.29/2003 - manufacture of molasses - losses within the prescribed limit or not - HELD THAT:- Section 37B of the Act confers the power upon the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act to issue directions for uniformity in the classification of excisable goods or with respect of levy of excess duties. It is on record that the petitioner was served with a showcause notice under Section 11A of the Act claiming the payment of duty and interest under Section 11AB of the Act to which a Defense Reply was submitted. It was incumbent upon the Central Excise Authorities to have considered the documents submitted by the petitioner alongwith his defense reply including the fact that the sugar mill of the petitioner was under the control of the State Authorities and of the Central Excise Authorities. There is no denial of the fact that the remission claimed by the petitioner was within the prescribed limit of 2% for remission of duty. It is well settled that without there being a foundation to invoke a larger period of limitation as provided in the proviso to Section 11A of the Act, no orders can be passed thereupon. Even otherwise in the present case, the fact with regard to the accident was well within the knowledge of State Authorities and there was no reason for the Central Excise Authorities to have denied the benefit of remission of duty as claimed by the petitioner under Rule 21. That being the case coupled with the fact that there was no specific allegation in the show-cause notice that the assessee had not paid the duty, the orders impugned being order dated 14.10.2011 (Annexure – 1), the appellate order as well as the order-in-original are clearly not sustainable and are set aside. It is well settled that central excise duty is payable on manufacture; although the word ‘goods’ has not been defined under the Act, it is well settled by the Hon’ble Supreme Court that for the article to be considered as ‘goods’, the same must be something which can ordinarily come to the market to be bought and sold. Once the goods are not marketable, they are not liable to duty. In the present case there is no material to allege or establish that the brown sugar was marketable and once there is no foundation to hold that brown sugar, on which the remission was claimed, was marketable goods, no question of payment of duty arises. Even otherwise, no allegation was levelled in the show-cause notice with regard to clandestine removal, which was required to be established while raising a demand under Section 11A of the Act. The show-cause notice was served to the petitioner therein calling upon the petitioner to show-cause as to why the application for remission may not be rejected mainly on the ground that no intimation was given to the Range Officer within 24 hours as prescribed in the Trade Notice - the said issue is covered by the judgment of the Tribunal in the case of Ramala Sahkari Chini Mills Ltd. [2007 (2) TMI 59 - CESTAT, NEW DELHI], which issue has attained finality. Even otherwise, the claim of the petitioner was well within the prescribed limit of being less than 2%. Thus, there being no material to allege against the petitioner that there was any evasion of duty, the impugned orders being order dated 28.11.2013 (Annexure - 6), the appellate order dated 07.07.2011 (Annexure - 5) as well as the order-in-original dated 30.12.2009 (Annexure - 4) are not sustainable and are set aside. Petition allowed.
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