Sonipat Coop. Sugar Mills Ltd. Vs. Commr. of Central Excise, - Court Judgment

Excerpt:
1. the appellants filed this appeal against the order-in-appeal whereby the refund claim, filed by the appellants, was rejected.2. brief facts of the case are that the appellants are engaged in the manufacture of sugar and they were clearing the sugar for free sale as well as the levy sugar, which is sold through public distribution system. the rate of duty in respect of free sale sugar is @ rs. 85/- per quintal whereas the rate of duty in respect of levy sugar is rs. 52/- per quintal. the levy sugar is released monthly as per the order received from the ministry of food and on certain occasions, the ministry of food directed the appellants for supply of levy sugar out of the free-sale sugar available with the unit, which is then adjusted in subsequent months as per the orders of the ministry of food. during the month of nov., 1998, the ministry of food, new delhi, vide letter dated 28-10-98, directed the appellants to release 512 mts of sugar as levy sugar out of free-sale sugar. the appellants, in respect of 512 mts of sugar, paid duty @ rs. 85/- per quintal applicable for free-sale sugar in spite of the fact that sugar, in question, was released as levy sugar as per the directions of ministry of food, which is liable to duty @ rs. 52/- per quintal. thereafter, the appellants filed a refund claim for differential duty, which was rejected-.3. the contention of the appellants is that the duty was paid by them and they filed a refund claim within time limit applicable to the refund. their submission is that the lower authorities relied upon the letter issued by the ministry of food and consumer affairs dated 13-10-98, which is applicable for the release of levy sugar for the month of october, 98. in this letter, it was mentioned that differential excise duty will be released to the sugar factory by the govt. of india. their submission is that for the release of levy sugar for the month of nov., 98, there was no such condition. they, further, submitted that the appellants are liable to pay duty leviable on the levy sugar as the sugar, in question, was released as levy sugar as per the directions of ministry of food and civil supply.4. ld. dr, appearing on behalf of the revenue, reiterates the findings of the lower authorities.5. the commissioner (appeals) in the impugned order held that differential excise duty arising out of sale of sugar for supply in the public distribution system to the sugar factory by the ministry of food and consumer affairs only.6. the commissioner based this finding on the letter dated 13-10-98 issued by the ministry of food and consumer affairs. this letter is in respect of supply of sugar in the public distribution system for the month of oct., 98 whereas in the present case, the dispute is in respect of release sugar for the month of nov., 98.7. letter dated 28-10-98 issued by the ministry of food & consumer affairs, which relates to the release of sugar for the month of nov., 98, does not contain any provision for reimbursement of differential duty.8. as the appellants cleared the levy sugar and paid duty at the rate applicable to free-sale sugar, the matter requires re-consideration, the impugned order is set aside and the matter is remanded to the adjudicating authority for de novo consideration. the adjudicating authority will decide afresh after affording an opportunity of personal hearing to the appellants. the appeal is disposed of by way of remand.

Judgment:
1. The appellants filed this appeal against the order-in-appeal whereby the refund claim, filed by the appellants, was rejected.

2. Brief facts of the case are that the appellants are engaged in the manufacture of sugar and they were clearing the sugar for free sale as well as the levy sugar, which is sold through Public Distribution System. The rate of duty in respect of free sale sugar is @ Rs. 85/- per quintal whereas the rate of duty in respect of levy sugar is Rs. 52/- per quintal. The levy sugar is released monthly as per the order received from the Ministry of Food and on certain occasions, the Ministry of Food directed the appellants for supply of levy sugar out of the free-sale sugar available with the unit, which is then adjusted in subsequent months as per the orders of the Ministry of Food. During the month of Nov., 1998, the Ministry of Food, New Delhi, vide letter dated 28-10-98, directed the appellants to release 512 MTs of sugar as levy sugar out of free-sale sugar. The appellants, in respect of 512 MTs of sugar, paid duty @ Rs. 85/- per quintal applicable for free-sale sugar in spite of the fact that sugar, in question, was released as levy sugar as per the directions of Ministry of Food, which is liable to duty @ Rs. 52/- per quintal. Thereafter, the appellants filed a refund claim for differential duty, which was rejected-.

3. The contention of the appellants is that the duty was paid by them and they filed a refund claim within time limit applicable to the refund. Their submission is that the lower authorities relied upon the letter issued by the Ministry of Food and Consumer Affairs dated 13-10-98, which is applicable for the release of levy sugar for the month of October, 98. In this letter, it was mentioned that differential excise duty will be released to the sugar factory by the Govt. of India. Their submission is that for the release of levy sugar for the month of Nov., 98, there was no such condition. They, further, submitted that the appellants are liable to pay duty leviable on the levy sugar as the sugar, in question, was released as levy sugar as per the directions of Ministry of Food and Civil Supply.

4. Ld. DR, appearing on behalf of the Revenue, reiterates the findings of the lower authorities.

5. The Commissioner (Appeals) in the impugned order held that differential excise duty arising out of sale of sugar for supply in the Public Distribution System to the sugar factory by the Ministry of Food and Consumer affairs only.

6. The Commissioner based this finding on the letter dated 13-10-98 issued by the Ministry of Food and Consumer Affairs. This letter is in respect of supply of sugar in the public Distribution System for the month of Oct., 98 whereas in the present case, the dispute is in respect of release sugar for the month of Nov., 98.

7. Letter dated 28-10-98 issued by the Ministry of Food & Consumer Affairs, which relates to the release of sugar for the month of Nov., 98, does not contain any provision for reimbursement of differential duty.

8. As the appellants cleared the levy sugar and paid duty at the rate applicable to free-sale sugar, the matter requires re-consideration, the impugned order is set aside and the matter is remanded to the adjudicating authority for de novo consideration. The adjudicating authority will decide afresh after affording an opportunity of personal hearing to the appellants. The appeal is disposed of by way of remand.