Decided on May 31,1991



R. Jayaraman, Member (T) - (1.) THIS is an appeal directed against the order of the Collector of Central Excise and Customs, Aurangabad bearing No. Collr/No. 20/89 dated 14 -3 -1989, demanding duty amounting to Rs. 50,007.04 in respect of molasses.
(2.) THE undisputed facts involved in this case are that the appellants who are manufacturers of sugar also produces molasses. The duty demand in respect of the molasses was in respect of the same stored in katcha pit No. 9 and was produced during the year 1977 -78, when the molasses was liable to duty under T.I. 68. In the case of goods classifiable under T.I. 68, there were relaxation of condition, such as declaration and acceptance of seperate storage premises for storing the excisable goods before removal.
(3.) SHRI Shah, the Ld. advocate, for the appellants, referred to the relaxation during the period available under T.I. 68 and pleaded that there was no restriction for storage of molasses produced during the year 1977 -78 in katcha pit. The restriction came into existence only in June, 1980, when the item was specifically brought under T.I. 15CC. The aforesaid molasses, on account of long period of storage, got deteriorated and on drawal of the sample, it was found to be not marketable and has got deteriorated. Hence, they took up the matter with the State Excise authorities by writing a letter dated 8 -12 -1980. After getting the permission from the State Excise authority, they addressed a letter to the Supdt. of Central Excise on 6 -3 -1983 and they also sought for permission to destroy the molasses, which are unfit for marketing. Thereafter, a show cause notice was issued on 19 -7 -1983, demanding duty in respect of the aforesaid molasses stored in katcha pit No. 9, in respect of which they have sought for permission of destruction. The duty has been demanded in terms of the contractual liability in terms of the bond executed by them. The Collector, in his adjudication proceedings, confirmed the duty and hence, the present appeal. Shri Shah during the arguments took us through the relevant letters and correspondences to urge his contention that the molasses relate to the year 1977 -78 production and it was stored in katcha pit, when there was no specific stipulation of storage in approved premises in respect of goods classifiable under T.I. 68. Since molasses, is subject to State Excise Control also, they can remove such molasses only under the permission issued by the State Excise Authorities. This molasses could not be cleared in time and got deteriorated. They executed a special bond undertaking not to claim remission of duty only after 1980 when restrictions were placed on storage of molasses in katcha pits. Hence, even there was no contractual liability existing at the time of storage of the molasses produced in 1977 -78. He also cited the following decisions of this Bench in his favour: (i) Shri Dudh Ganga Ved Ganga SSK Ltd. v. collector reported in 1987 (29) ELT 22. (ii) Yashwant S.S.K. Ltd. v. Collector of C. Excise reported in 1990 (49) ELT 534. (iii) Siddheshwar Sahakari Sakhar Karkhana Ltd. v. Collector reported in 1990 (50) ELT 484. ;

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