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Issues:
1. Central Excise duty on excess molasses production. 2. Control and regulation of molasses production under U.P. Seera Niyantran Adhiniyam, 1964. 3. Appeals and revisions against Central Excise duty imposition. 4. Arbitrary orders by authorities. Central Excise Duty on Excess Molasses Production: The petitioner, a sugar manufacturing company, produced excess molasses during the 1987-88 crushing season. Despite requests to the Controller of Molasses for storage, the overflow of molasses occurred. Central Excise duty was imposed on the excess quantity that overflowed. The appellate authority acknowledged the shortage was due to lack of storage space but upheld the duty imposition. The Govt. of India upheld the decision, citing lack of notification to Central Excise authorities about the overflow and insufficient evidence of loss due to overflow. The High Court found the overflow occurred beyond the petitioner's control, quashed the duty imposition, and ordered refund of any amount paid. Control and Regulation under U.P. Seera Niyantran Adhiniyam, 1964: The production, sale, supply, and distribution of molasses are regulated under the U.P. Seera Niyantran Adhiniyam, 1964. The Controller of Molasses exercises control and allocates molasses to needy persons upon application. Despite requests for storage of excess molasses, no action was taken by the Controller, leading to overflow. The District Magistrate also notified the Controller about the overflow. The High Court observed that the overflow was due to circumstances beyond the petitioner's control, emphasizing the failure of the Controller to act on repeated requests. Appeals and Revisions Against Central Excise Duty Imposition: The petitioner appealed the Central Excise duty imposition on the excess molasses production. The appellate authority acknowledged the shortage was due to lack of storage space but upheld the duty imposition. The Govt. of India dismissed the revision citing lack of notification to Central Excise authorities about the overflow and insufficient evidence of loss due to overflow. The High Court deemed the orders arbitrary and quashed the duty imposition, emphasizing the uncontrollable circumstances leading to the overflow. Arbitrary Orders by Authorities: The High Court found the orders passed by the authorities, including the revising authority, to be arbitrary and deserving of being quashed. It noted that the overflow of molasses occurred beyond the petitioner's control, with no action taken by the Controller despite repeated requests. The Court held that the duty imposition on the loss of molasses was unwarranted by law, leading to the successful writ petition by the petitioner and the refund of any amount paid in pursuance of the interim order.
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