CAREW AND CO. LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE controversy in this case emanates from rejection of the refund application filed by the appellant, namely Carew and Co. Ltd., Rosa (U P.) under the provisions of section 36 of the Central Excises and Salt Act, 1944, and has arisen as a result of demand raised by the Central Excise Authorities in respect of "bagasse" consumed by the appellant in their sugar manufacturing factory during the period 1 -3 -1975 to 29 -4 -1975.

(2.) THE facts as set out in the grounds of revision indicate that the Company, during the course of manufacture of sugar in their factory, used sugarcane as raw material and while extracting juice, the fibrous material comes out in a moist condition, known as "bagasse". The contention of the appellant is that this material is more or less a waste product and has no or very little value and as such is stored in the open in the factory premises so that after it dries up, it can be used as fuel in the boilers, which user is pleaded to be as a convenient mode of destruction of the waste material.

(3.) IT was pleaded that after Itme 68 was introduced in Central Excise Tariff with effect from 1 -3 -1975, the company filed a classification list showing molasses against the entry in column 5 of the format of the classification list under the heading : "All other goods". Excise duty was paid accordingly on molasses only. However, on 20 -4 -1977 the Superintendent, Central Excise, Saharanpur, within whose jurisdiction the factory fell, served a show cause notice on the company, requiring cause to be shown as to why duty amounting to Rs. 16,276.92, be not recovered on account of bagasse valued at Rs. 16,27,692.30, cleared from the factory. Its price was computed at the rate of Rs. 10 per quintal and has been allegedly used in the factory during the period 1 -3 -1975 to 29 -4 -1975. The notice was issued on the view that it was not an intermediate product or a component product used in the factory of production, within the contemplation of Notification No. 58/75 -C.E., dated 1 -3 -1975,