ARIGNAR ANNA SUGAR MILLS LTD. Vs. CCE, TRICHY

JUDGEMENT

(1.) THIS appeal filed by the appellants viz. M/s. Arignar Anna Sugar Mills, arises out of the order in appeal No. 197 & 198/2001 -(C. Ex) TRICHY (PNV) dated 28.9.2001 passed by the Commissioner of Central Excise (Appeals) Trichy whereby he has rejected both the appeals filed by the appellants before him against the order in original No. 16/97 and 5/2000.

(2.) The original authority under the said orders in original had rejected the refund claims filed by the assessee. The issue involved in both the appeals are identical and hence they are taken up together for disposal according to law. The brief facts of the case are that the assessees are engaged in the manufacture of sugar. While doing so, molasses emerges as a bye -product. On 10.5.1995 they approached the jurisdictional Assistant Commissioner, Thanjavur seeking permission to store molasses in kutcha pits within the licensed premises without payment of duty on the ground that their storage capacity in steel tanks is 13,000 MTs. The Assistant Commissioner, vide his letter dated 28.7.1995 addressed to the appellants granted permission under rule 173H for storage of duty paid molasses in kutcha pit within the licenced factory premises. Vide said letter the appellants were clearly instructed that subsidiary invoices and a stock register has to be maintained for clearance of the duty paid molasses from the kutcha pits and the valuation rules in force should be taken into account for arriving at the assessable value of the molasses for payment of duty. Thereupon the assessee vide their letter dated 31.7.1995 and 22.11.1995 addressed to the Asstt. Commissioner stated that since the market value of molasses is very less compared to their last sale and since there was no demand for molasses at that time, they were provisionally debiting in the PLA under protest based on the last sale value basis. They had also stated in the said letter that if the sale proceeds is less at the time of actual disposal, the excise duty adopted has to be adjusted on the future sale of molasses. Later on the assessee had preferred refund claim on the ground that a portion of the molasses stored in kutcha pit was sold at a price lower than the value adopted originally for payment of duty. Show cause notice was issued to the appellants vide C No. IV/16/82/95 -Cx Pol dated 24.10.1996 to show cause as to why the protest lodged by them should not be vacated and their claim for taking credit of Rs. 4,67,259/ - should not be rejected. On receipt of the reply to the show cause notice and after granting personal hearing to their Consultant accompanied by their Senior Manager, the case was decided by the Asstt. Commissioner vide order in original dated 24.6.1997 by which he has rejected the their claim for the said sum. Another show cause notice C No. V/Ch. 17/18/21/2000 -FC dated nil Nov. 2000 was also issued asking them as to why the refund claim of Rs. 19,37,010.00 should not be rejected and after considering the reply filed by them and after granting personal hearing on 4.1.2001 the matter was adjudicated by the original authority vide Order in original dated 28.2.2001 rejecting their claim for the said amount and on appeal before the Commissioner (Appeals), the Commissioner (Appeals) upheld the orders in original. It is against the said order in appeal that the assessees have come in appeal on the following grounds:

(3.) SHRI A. Jayachandran, learned DR on the other hand defended the impugned order. He also invited our attention to the judgment rendered by the Hon'ble Supreme Court in the case of Wallace Flour Mills Company Ltd. v. CCE reported in : 1989 (44) ELT 598 (SC) : 1990 (26) ECR 169 (SC) : ECR C 1549 SC wherein it has been held that it is well settled by the Scheme of Central Excises and Salt Act and clarified by several decision that even though the taxable event is manufacture or production of excisable article, the duty can be levied and collected at a later stage for administrative convenience. It was also held that recovery of duty according to "date of removal" does not make removal to be the taxable event for Central Excise Rules 9A. It was also held that when the goods were unconditionally exempted from duty on the date of manufacture, but were dutiable on the date of their removal, they would be liable to duty because on the basis of Rule 9A of the CE Rules. 1944, the Excise authorities are within competence to apply the rates prevalent on the date of removal. He also invited our attention to the letter bearing OC No. 1149/99 dated 16.12.1999 addressed to the Chief Executive of the appellants by the Range Sudpt. wherein inter alia the Supdt. had informed them that request for remission of duty would not be considered and they were advised to construct one more steel tank. It was also made clear in the said letter that in the absence of any provision in the Central Excise Act or the rules made thereunder for refund of duty, recommendation for refund of duty cannot be made to the Assistant Commissioner and in case they felt aggrieved, they were advised to approach the Assistant Commissioner in the matter. In the circumstances the learned DR submitted that the appeals filed by the party are devoid of merits and he prayed for dismissal of the appeals.