D.S.M. SUGAR Vs. CCE

JUDGEMENT

(1.) BOTH the appeals are on similar issue and therefore, the same are taken up for hearing together for disposal.

(2.) THE relevant facts of the case in brief are that the appellants are engaged in the manufacture of V.P. Sugar and molasses falling under Chapter 17 of the Central Excise Tariff Act, 1985. By a letter dated 20 March 1995, the appellants informed their Range Officer that a fire broke out in their sugar godown on 20.03.95 at 03.20 p.m. Further, by letter dated 17 April 1995 the appellants requested the Range Officer to allow them to segregate the sugar bags left in the godown after fire. From 19.4.95 to 15.6.95, the appellant segregated the sugar bags in the presence of the Sector Officer and the representatives of the Insurance Company and shortage of 8066 Quintals of sugar valued at Rs. 90,33,920.00 attracting Central Excise Duty amounting to Rs. 6,85,610.00 was detected. A show cause notice dated 14.8.95 was issued proposing demand of duty of Rs. 6,85,610.00 leviable on 8066 quintals of sugar under Rule 9(1) of the erstwhile Central Excise Act, 1944. By order in original dated 16.2.01, the Assistant Commissioner of Central Excise confirmed the demand of duty. By order in appeal dated 28 September 2004 Commissioner (Appeals) rejected the appeal. It has been observed that the appellant had not applied for remission of duty under Rule 49 of Rules 1944 with the jurisdiction of Commissioner of Central Excise and therefore they are liable to pay duty as demanded. The appellant filed the appeal before this Tribunal against the said impugned order, being Appeal No. E/866/2005.

(3.) THE learned advocate on behalf of the appellants submits in Appeal No. E/866/2005 that there is no dispute that the excisable goods were lost in fire. It is revealed from the various correspondences that the department is aware of the fire occurred in the factory of the appellant. He drew the attention of the Bench, the certificate dated 17 April 2001 of the Insurance Company certifying that they have not paid any excise duty under fire claim. He submits that the show cause notice was issued on erroneous basis that the appellant have illegally removed 8066 quintals of sugar without payment of duty from the godown No. 7. He submits that in this case, there is no removal of goods. Therefore, the demand of duty under Rule 9 & 49 of the erstwhile Central Excise Rules, 1944 are not sustainable. He, further submits that the Commissioner (Appeals) categorically stated that there is no clandestine removal of the goods and therefore the demand of duty is not maintainable. He also submits that they have claimed remission of duty under Rule 49 of Rules 1944 as evident from their reply against show cause notice dated 14.8.95. He submits that during the relevant period, the Assistant Commissioner was the competent officer for allowing the remission of duty. As such, the Assistant Commissioner should have granted the remission of duty as claimed by the appellants in their reply to show cause notice.