1987 (5) TMI 353 - AT - Central Excise

Summary

Issues:
- Discrepancy in the quantity of molasses cleared from the factory.
- Allegation of duty evasion and clandestine removal of molasses.
- Challenge to the Chemical Examiner's analysis and the department's case.
- Argument regarding duty demand being barred by limitation.

Analysis:
- The case involved a discrepancy in the quantity of molasses cleared from the factory, with the department alleging an excess of 10,633.11 Qtls. The appellants contended that only 4,391.82 Qtls. were cleared, supported by records and annual stock taking. They attributed the excess to water entering the tank due to a broken roof, rendering the product unfit for consumption. The department's case relied on the Chemical Examiner's analysis, which the appellants challenged due to the failure to account for water content.

- The appellants argued that the duty demand was barred by limitation, as there was no fraud or clandestine removal. Although this issue was not raised before the lower authority, the appellants asserted that it was a valid legal point that could be raised at the appeal stage. They cited a previous tribunal decision to support their position.

- The tribunal considered the evidence presented by both parties and found merit in the appellants' argument. They concluded that the excess molasses was primarily water mixed with the product, making the duty demand and penalty unjustified. Additionally, the tribunal held that the duty demand would be barred by limitation, further supporting the appellants' case.

- Ultimately, the tribunal set aside the lower authority's orders, allowing the appeal in favor of the appellants. The judgment highlighted the lack of justification for the duty demand and penalty, emphasizing the presence of water in the excess quantity of molasses. The decision also reiterated the point that the duty demand was time-barred, further strengthening the appellants' position in the case.