1994 (6) TMI 59 - AT - Central Excise

Summary

Issues: Appeal against Central Excise Order regarding discrepancy in stock of molasses and imposition of duty, confiscation, and penalty.

Summary:
The appeal was made against an Order passed by the Additional Collector of Central Excise, Kanpur, concerning a discrepancy in the stock of molasses at M/s. Bajaj Hindustan Ltd. The Central Excise Officers found that the actual stock of molasses was higher than the recorded balance, leading to a show cause notice demanding duty, proposing confiscation of excess molasses, and imposition of penalty.

In the appeal, the appellants argued that the volume of molasses can vary due to factors like foam formation influenced by ambient temperature and chemical decomposition, making the dip or volumetric method of weight ascertainment unreliable. They highlighted that daily production is recorded after actual weighment, so while the weight remains constant, the volume may change due to foaming. Reference was made to ISI specifications for storage tanks, which provide a 10% allowance for foam.

During the hearing, the SDR acknowledged that foaming could occur due to storage and that the excess noticed was within 10%. Considering the ISI specifications allowing for foaming and the acknowledgment of the SDR, the Tribunal found merit in the appellants' contentions. As the foaming could affect the accuracy of dip reading measurements, the impugned order was set aside, and the appeal was allowed.