2013 (11) TMI 744 - AT - Central Excise

Application to destroy Molasses as unfit for human consumption Molasses has more than 50% of the water content - Claim for remission of the duty Held that - The sample of molasses does not conform to the density characteristics mentioned for Cane Molasses and the percentage of water content indicates 61.9 - the letter dated 04.11.2011 from the office of the Prohibition and Excise Department of the Government of Gujarat which specifically directed the appellant to destroy the molasses - Following Shakumbari Sugar & Allied Ind. Vs. Commissioner of C.EX., Meerut-I 2006 (3) TMI 640 - CESTAT, NEW DELHI - the molasses were declared to be unfit for human consumption - In this situation, the demand of duty on the drainage out quantity of molasses is not justified. There is link between the test report given by the Dy. Chief Chemical Examiner and the letter of the Inspector of Prohibition Excise as regards the contents of Molasses 430.830 MT. in tank No. 1 of the appellant factory - it is an admitted fact that the molasses contents more than 50% of the water and is not usable and not marketable thus the application for the remission of the duty liability needs to be allowed - the goods which are indicated as unfit for human consumption, needs to be destroyed order set aside Decided in favour of Assessee.

Summary

Issues:
1. Appeal against Order-in-Appeal for remission of duty on molasses with high water content.

Analysis:
The appellant, a sugar manufacturer, sought remission of duty on molasses with over 50% water content, deemed unfit for human consumption. The Adjudicating Authority dismissed the remission claim, upheld by the first Appellate Authority. The appellant argued citing a letter from the Prohibition & Excise Department directing molasses destruction due to high water content. The Tribunal analyzed test reports showing 61.9% water content and the Prohibition Department's directive to destroy 430.830 MT of molasses. The Superintendent's visit note confirmed the water content issue. The Tribunal found a reliable link between the reports and upheld the duty remission application.

The Department contended lack of evidence on water's entry into molasses. The Tribunal noted the Central Excise lab report's non-conformance to density standards for Cane Molasses and the Prohibition Department's directive based on high water content. The Tribunal emphasized the visit note's verification of 430.830 MT of molasses with over 50% water content, justifying duty remission due to the molasses being unfit for human consumption.

The Tribunal referred to a similar case where watery molasses declared unfit for human consumption didn't require duty payment. The Tribunal set aside the lower authorities' orders, allowing the appeal for duty remission on the molasses. The decision was based on the molasses being unfit for consumption and the established link between reports and directives, aligning with the duty remission application.

In conclusion, the Tribunal found in favor of the appellant, setting aside the previous orders and allowing the appeal for remission of duty on the molasses with high water content, deemed unsuitable for human consumption.