KESAR ENTERPRISES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellants are manufacturers of sugar and molasses. During the sugar season 1997 -98, a shortage of 3591.05 Quintals of molasses was detected in their steel tank No. 2 on stock -taking undertaken by the appellants themselves on 19 -1 -99. The appellants submitted an application on 12 -2 -99 under Rule 49 of the Central Excise Rules, 1944 for remission of duty on the said quantity of molasses claiming that the shortage was due to storage loss. The Commissioner of Central Excise rejected the claim. Hence this appeal.

(2.) EXAMINED the records and heard both the sides. The learned Chartered Accountant for the appellants submitted that under CBEC Circular No. 261/15/82/CX. 8, dated 18 -7 -83, storage loss up to 2% in pucca pits and steel tanks were liable to be condoned. Officers of Central Excise had, on 28 -10 -98, found a shortage of 2390.41 Qtls. of molasses in Tank No. 2 on checking the stock by dip method of measurement. The shortage of 3591.05 Qtls. found in the tank on 19 -1 -99 included this quantity of 2390.41 Qtls. The appellants' application dated 12 -2 -99 for remission of duty on this quantity of 3591.05 Qtls. of molasses was rejected by the Commissioner by order dated 9 -3 -2000. In an appeal preferred against that order, this Tribunal found that the order was violative of natural justice and, therefore, remanded the matter to the Commissioner for fresh decision. In the remanded proceedings also, the Commissioner rejected the claim of remission. The Chartered Accountant further submitted that the entire shortage of, molasses was due to natural causes such as evaporation, pump/pipeline loss, etc. He also submitted that the dip method of measurement of the volume of molasses in the tank was not reliable as held by the Tribunal in various cases. In this connection, he relied on the following decisions : -

(3.) THE Chartered Accountant had a further case that the Commissioner had again violated the principles of natural justice inasmuch as no show cause notice had been issued to reject the claim for remission.