2000 (5) TMI 316 - AT - Central Excise

Summary

Issues:
Demand of duty on molasses due to alleged negligence in preventing auto-combustion.

Analysis:
The case involved a demand of Rs. 37,46,827 confirmed by the Ld. Commissioner against the appellants for allegedly not taking adequate steps to prevent auto-combustion of molasses. The appellants, engaged in V.P. Sugar manufacture, stored molasses in tanks, but auto-combustion started despite continuous water spraying during the summer. The appellants informed both Central Excise and State Excise authorities about the issue and even approached the High Court for intervention when the molasses became unfit for consumption. The State Excise Controller eventually issued permits for the molasses, but distilleries refrained from lifting them, leading to the molasses being unsellable. The appellants requested remission of duty, but instead, the Ld. Commissioner issued a show-cause notice for duty demand.

The appellant's counsel argued that all reasonable precautions were taken to prevent auto-combustion, and since the molasses became unfit for human consumption despite their efforts, the duty demand was unwarranted. On the other hand, the respondent, represented by the JDR, contended that the appellants did not make sufficient efforts to dispose of the molasses promptly or prevent auto-combustion, as highlighted in the Ld. Commissioner's order.

Upon hearing both sides, the Tribunal noted that molasses are under dual control by Central Excise and State Excise authorities. It was observed that the appellants had diligently tried to prevent auto-combustion, including seeking guidance from the authorities and even approaching the High Court. The Tribunal found no negligence on the part of the appellants and deemed it a case fit for duty remission. Citing previous judgments like Saraya Sugar Mills v. CCE and Shankar Sugar Mills v. CCE, the Tribunal held that similar cases had been decided in favor of the appellants. Consequently, the Tribunal set aside the impugned order, allowed the appeal, and directed that any consequential relief be granted to the appellants as per the law.

In conclusion, the Tribunal ruled in favor of the appellants, finding no negligence on their part in preventing auto-combustion of molasses, and held that the duty demand was not sustainable based on the circumstances presented. The decision was supported by relevant case law and established precedents in similar matters.