2003 (9) TMI 502 - AT - Central Excise

Summary

Issues: Violation of conditional permission to store molasses in kutcha pits without payment of duty.

Analysis:
1. Violation of Conditional Permission: The case involved the appellants seeking permission to store molasses in kutcha pits due to a full steel tank. The Commissioner allowed this storage on the condition of payment of Central Excise duty. However, the appellants removed the molasses to kutcha pits without fulfilling the duty payment condition. The lower authorities confirmed the duty demand, with the penalty being reduced to Rs. 1,000/- in each case by the Commissioner (Appeals).

2. Legal Arguments: The advocate for the appellants contended that the permission to remove molasses should not have been conditional as per Rule 49 or Rule 173H. He cited previous decisions to support this argument. Additionally, it was mentioned that the molasses deteriorated after being stored in kutcha pits due to mixing with rainwater, and the application for remission of duty was rejected by the Superintendent.

3. Tribunal's Decision: After hearing both sides and examining the case records, the Tribunal found that the present case differed from previous decisions cited. The Commissioner had made the removal of molasses to kutcha pits, unapproved storage places, subject to prior duty payment. While the citation of Rule 173H might not have been appropriate, the Tribunal upheld the conditional permission given by the Commissioner to protect revenue. The appellants were not allowed to remove the molasses to kutcha pits without paying duty unless seeking a modification from the Commissioner. Consequently, the Tribunal upheld the duty demand by the lower authorities, as the molasses were removed without duty payment, and the penalty was maintained at Rs. 1,000/- in each case.

4. Conclusion: The appeals were rejected, affirming the duty demand and penalty imposed on the appellants for violating the conditional permission to store molasses in kutcha pits without paying Central Excise duty. The Tribunal emphasized the importance of adhering to conditions set by authorities to safeguard revenue and maintain compliance with excise regulations.