9911796707
TMI Blog1990 (4) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... Jan., 1989. Since both these appeals involve consideration of the same issue and points of law, they were heard together and hence proposed to be disposed of by this common order. 2. The appellants are manufacturers of sugar and in the process of manufacture of sugar, the by-product molasses is produced, which is also liable to excise duty under the erstwhile Central Excise Tariff Item 15CC. Though the appellants have provided for storage of molasses in steel tank, during the year 1981-82 because of unprecedented bumper crop they had to crush more sugarcane on account of which more molasses came to be produced. They, therefore, requested for permission to store the molasses in katcha pits, which was granted by the Asstt. Collector with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or, the demands aforesaid were confirmed by the Collector. The present appeals are against the orders of the Collector. 3. Shri Joshi, the learned advocate on behalf of the appellants, submitted that the Collector was not justified in demanding the duty involved on the loss, which has occurred due to natural causes. His arguments can be briefly summed up as below: There was a heavy crushing of sugarcane and hence the storage capacity for molasses being inadequate, they have obtained permission to store the molasses in katcha pits. Only after obtaining such permission they have stored the molasses in katcha pits. The molasses is fully controlled and even removals are physically controlled by the State Excise authorities and hence there c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue with regard to the demanding duty on account of execution of Special B-2 bond was considered by this Bench in the case of Shri Dudhganga Vedganga Sahakari Sakhar Karkhana Ltd. and Others v. Collectors of Central Excise Pune Aurangabad and Other reported in 1987 (29) E.L.T. 22 (Tri.) and both the Members in separately recorded concurring notes agreed that merely because of the Special B-2 bond, the department cannot demand the duty by forcing the appellants to forego remission of duty statutorily provided for. It was also held in the aforesaid decision that if the Department desires to enforce the B-2 bond, the proper forum is Civil Court and not the Adjudicating Authority or the Tribunal. In view of this decision squarely covering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thers reported in 1987 (29) E.L.T. 22 (Tri.). In that case also storage of molasses was permitted in katcha pits by the Departmental authorities on execution of Special B-2 Bond agreeing not to claim remission of duty on loss, which may occur due to natural causes or otherwise. This Bench, consisting of the Hon ble Members S/Shri Dilipsinhji and K. Gopal Hegde held that demands even in terms of Special B-2 Bond executed are not enforceable and the statutory remedy and exercise of judicial decision vested under Rule 49 cannot be extinguished. On the question of legal authority to enforce the Special B-2 Bond it was held by the Bench that this is not a matter which falls within the purview of the Tribunal and the question of legality of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es stored in katcha pits was brought to the notice of the Department by the appellants themselves by claiming remission of duty, on the basis of which proceedings have been initiated. Show cause notice was initially issued by the Supdt. answerable to the Asstt. Collector. In view of this factual position, we are unable to appreciate the transfer of the case to the Collector citing the reason that under proviso to Sec. 11A as amended, the case is required to be decided by the Collector. It is not the case of the Department that the Collector has thaken up the proceedings because powers of remission of duty are vested in him. We are, therefore, unable to appreciate the basis, on which the adjudication has been done by the Collector without an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Collector has indicated that this permission is without prejudice to the right of the Department for recovery of duty, this cannot be construed as a condition for permitting destruction because the proviso contemplates that there may not be any demand for duty on such goods claimed by the manufacturer as unfit for consumption or for marketing. Duty liability on such goods gets extinguished by virtue of this proviso, once such goods are ordered for destruction and they have been destroyed by following the prescribed procedure and conditions. In view of these provisions also we hold that even otherwise duty is not liable to be paid by the appellants. We, therefore, allow the appeals and set aside both the orders of the Collector of Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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