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M/s Kisan Sahkari Chini Mills Ltd. Versus Union of India And Others

2015 (10) TMI 45 - ALLAHABAD HIGH COURT

Denial of refund claim - Refund of supervision charges - Held that:- The supervision charges as contemplated under Rule 4(4) of the Rules of 2002 read with the trade notice dated 29.10.2002 is not for the clearance or storage of sugar as and when it happens in the godowns, but, the supervision charges is for the duration of the period when the godown is in the physical control of the respondents where the sugar is stored. - So long as the sugar is stored in godown outside the factory premises th .....

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9-2015 - Hon'ble Tarun Agarwala And Hon'ble Surya Prakash Kesarwani, JJ. ORDER ( Per: Tarun Agarwala,J. ) 1. The petitioner is engaged in the manufacture of sugar and molasses. The petitioner was granted permission for storage of non duty paid sugar in godowns situated outside the factory premises on account of paucity of storage space in the factory premises. This premission was granted subject to payment of supervision chareges. The respondents issued a letter dated 7.11.2002 directing .....

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er, the storage and clearance of sugar was done on 64 days under the supervision of the excise authorities and, therefore, the petitioner was liable to pay ₹ 49,216/- as supervision charges. Accordingly, the petitioner applied for a refund of ₹ 9,73,515/-. This claim for refund was rejected against which the petitioner filed an appeal before the Tribunal which was rejected by an order dated 17.7.2008 holding that the appeal was not maintainable and that the petitioner should approach .....

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heard Sri A.P.Mathur, the learned counsel for the petitioner and Sri B.K.S. Raghuvansi, the learned counsel for the respondents. 4. The excise duty is leviable at the time of removal of the goods. Rule 47(5) of the Central Excise Rules, 1944 (hereinafter referred to as the "Rules") permitted the manufacturer to store goods in exceptional circumstances without payment of duty on account of shortage of storage space at the premises of the manufacturer subject to certain conditions impose .....

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thout payment of duty would be made available to the manufacturers subject to adequate revenue safeguard. 5. Subsequently, the Central Excise Rules,2002 (hereinafter referred to as the "Rules of 2002")were promulgated w.e.f. 1.3.2002. Rule 4 provided that every person who produces and manufactures of any excisable goods and who stores such goods in a warehouses would be liable to pay duty on such goods in the manner provided in Rule 8 and that no excisable goods shall be removed withou .....

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A perusal of the aforesaid indicates that in exceptional circumstances having regard to the nature of the goods and shortage of storage space at the premises of the manufacturer, the Commissioner may permit a manufacturer to store the goods at any other place outside their factory premises without payment of duty. 7. Based on the aforesaid Rule of 2002, a trade notice dated 29.10.2002 was issued. Under this trade notice permission to store non-duty paid goods in godowns outside the factory premi .....

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cks of non duty paid sugar lying in the outside godowns is first cleared. e) That the party gives an undertaking in writing that it should pay appropriate duty of excise in respect of all the sugar taken for reprocessing from the stocks stored in the said godowns and after reprocessing no refund of excise duty shall be claimed by the party of the resultant sugar. f) That the duty involved in respect of sugar in transit and there after so stored outside should be secured by Bond (Specimen attache .....

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t the non duty paid sugar could be stored under the physical control of the Central Excise authority on cost recovery basis. Based on the said trade notice, the respondent issued a letter dated 7.11.2002 granting permission to the petitioner to store goods outside their factory premises subject to deposit of supervision charges on cost recovery basis. The cost recovery basis was calculated @ ₹ 21,532/- per month. This calculation has been accepted and has not been questioned in this writ p .....

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