2008 (8) TMI 695 - AT - Central Excise

Summary

Issues:
1. Appeal against order of Commissioner (Appeals) regarding confiscation of excess molasses.
2. Validity of excess stock of molasses due to foaming.
3. Contention on the Dip reading method for stock verification.
4. Allowance for foaming during storage of molasses.
5. Confiscation, redemption fine, and penalty determination.

Analysis:
1. The appeal was filed against the Commissioner (Appeals) order that set aside the confiscation of excess molasses, redemption fine, and penalty. The Tribunal reviewed the case to determine the validity of the excess stock of molasses.

2. The Authorised Signatory of the Respondent admitted that the excess molasses in tank No. 2 was due to foaming. The Tribunal considered the method of determining the stock of molasses by dip method and the contention that it was erroneous.

3. The Tribunal discussed the decision in the case of Kishan Sahkari Chini Mills Ltd. v. CCE, Meerut-II, where it was held that the dip rod method for stock verification was justified. The Respondent's argument against the Dip reading method was deemed not sustainable.

4. Referring to the decision in the case of Bajaj Hindustan Ltd. v. CCE, Kanpur, which allowed a 10% allowance for foaming during storage of molasses as per ISI specifications, the Tribunal considered the issue of foaming in the present case. The Tribunal upheld the Respondent's eligibility for a 10% allowance for foaming during storage of molasses.

5. The Tribunal noted that the excess quantity of molasses in tank No. 2 was more than 18% of the stock, which exceeded the allowable 10% for foaming. Consequently, the Tribunal upheld the confiscation of the excess quantity of molasses by 10% and reduced the redemption fine and penalty to Rs. 2,00,000/- and Rs. 40,000/- respectively. The order of the Commissioner (Appeals) was set aside, and the appeal was disposed of accordingly.