1990 (5) TMI 126 - AT - Central Excise

Summary

Issues:
- Appeal against the order of the Collector of Central Excise regarding the demand for duty on deteriorated molasses stored by the appellants.
- Interpretation of Rule 49 of the Central Excise Rules for duty remission in cases of loss or destruction by natural causes or unavoidable accidents.
- Whether the molasses becoming solidified due to excessive heat qualifies as a case for duty remission under Rule 49.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Bombay challenged the order of the Collector of Central Excise regarding the demand for duty on molasses stored by the appellants, which had deteriorated and solidified due to high temperatures. The Collector had confirmed the duty demand under Rule 9(2) read with Rule 49 of the Central Excise Rules. The appellants contended that their claim for remission of duty was rejected on the basis that the deterioration was not due to natural causes like earthquakes. The appellants argued that the molasses had indeed deteriorated and were unfit for distillation, requesting permission for destruction, which had not been granted. The Tribunal noted the provisions of Rule 49, emphasizing that duty remission is applicable in cases of destruction or loss by natural causes or unavoidable accidents. The Collector had not considered the request for destruction of the molasses claimed to be unfit for marketing, and the Tribunal found that the second proviso of Rule 49 could be applicable in this case. The Tribunal set aside the Collector's order and remanded the case for reconsideration, directing the Collector to assess the request for destruction of the molasses and to pass orders in accordance with the law.

The key issue revolved around the interpretation of Rule 49 of the Central Excise Rules concerning duty remission in cases of loss or destruction by natural causes or unavoidable accidents. The Tribunal highlighted that the duty shall not be demandable if excisable goods have been lost or destroyed by natural causes or unavoidable accidents, subject to the satisfaction of the proper officer. In this case, the molasses had solidified due to excessive heat, rendering them unmarketable. The appellants had requested permission for destruction, which was not granted. The Tribunal emphasized that if goods become unfit for marketing or consumption for any reason, the Collector must consider the request for duty remission and prescribe necessary conditions for disposal. The Tribunal found that the Collector had not appropriately considered the request for destruction of the molasses and confirmed the duty demand on goods claimed as unfit for marketing. Therefore, the Tribunal set aside the Collector's order and remanded the case for proper consideration of the request for destruction and duty remission under Rule 49.

In conclusion, the Tribunal allowed the appeal, setting aside the Collector's order and remanding the case for reconsideration. The Tribunal directed the Collector to assess the request for destruction of the molasses claimed to be unfit for marketing and to pass orders in accordance with the law. The decision emphasized the importance of considering requests for duty remission under Rule 49 in cases where goods become unmarketable or unfit for consumption, even if not completely destroyed by natural causes or unavoidable accidents.