9911796707
TMI Blog1992 (11) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... the non-duty-paid molasses in Katcha Pit on execution of special B.2 Bond in the year, 1983 by the Department. But the case of the Department is that all such manufacturers were informed under Trade Notice No. 121/3-Ch. 17/88 dated 28-12-1988 that the storage of molasses in Katcha Pits after payment of duty and in accordance with the provisions of Rule-173H of the Central Excise Rules, 1944, was allowed. However, this facility of storing non-duty-paid molasses was withdrawn and the appellants without intimating Central Excise Officers got the molasses destroyed through State Excise authorities and therefore, the demand is made. 3. The learned Counsel, Shri P.R. Biswas contended that since the molasses had become unfit for human consumption, no duty could have been demanded on those molasses in terms of the provisions of Rule-49 of the Central Excise Rules, 1944. He also contended that these molasses were accordingly destroyed in the presence of the Sub-Inspector of Excise of the State Excise Department and the Certificate dated 2-5-1990 was produced before the Adjudicating Authority. These facts were not included. Therefore, the demand is not in accordance with law. In support o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.R. is that as per the undertaking of the appellants and on the basis of special B.2 Bond they are liable to pay duty on the goods even if they are lost or damaged. In this connection, we may point out that the learned Adjudicating Authority did not dispute the fact that the goods in question had become unfit for human consumption. The learned Assistant Collector in his Order stated as follows :- ......It may be the fact that the goods were unfit for human consumption and ordered for destruction by State Excise authority vide their order dated 29-5-1989. But as per the undertaking of the manufacturers and on the basis of special B.2 bond the party is liable to pay duty on the goods even if those are lost or damaged...... In this connection, the learned Consultant, Shri Biswas relied on the decision reported in 1987 (29) E.L.T. 22 wherein at page-40(para-56) the Tribunal held as follows :- 56. From the scheme of the Act and Rules and the decided cases, it is clear that the sugar factories are entitled to remission of duty in respect of Molasses which were lost due to natural causes or become unfit for distillation. Therefore, it could be said that the orders of the two Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants were destroyed on 27-5-1989 by Shri Rajeshwar Pandey, Inspector of Excise, Sadar Area, Motihari. This fact is not disputed by the Department. 6. It is also seen that the appellants addressed a letter dated 10-2-1989 to the Assistant Commissioner of Excise, Patna stating that on chemical analysis, the above-disputed 5759.44 quintals of the residue molasses of the season, 1987-88, were certified to be unfit for human consumption as per report of the Excise Chemical Examiner, Patna. In view of that report under the supervision of the State Excise authorities, the Molasses in question were destroyed by the appellants. It is thus clear that Molasses had already become unfit for human consumption. In view of second proviso to Rule-49(l), no such duty can be claimed on such Molasses which have become unfit for human consumption. The second proviso to Rule-49 reads as follows :- Provided further that the proper officer may not demand duty due on any goods claimed by the manufacturer as unfit for consumption or for marketing subject to such conditions as may be imposed by the Collector by order in writing. In this connection, the learned Consultant, Shri Biswas also r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49(1) of the Central Excise Rules, 1944 is that the excisable goods are not liable to duty if they are unfit for consumption or marketing. The substantive condition for claiming remission of duty is that the goods are destroyed in a manner so that these are irretrievable as such goods. Since in this case, the destruction of the goods in question is not disputed no duty can be demanded and at best, only a penalty can be imposed. The learned Consultant, Shri Biswas further relied on the decision of the Tribunal reported in 1992 (58) E.L.T. 270 (Tribunal) wherein at page-274 (para-12) it is held as follows :- It is thus seen that when the molasses were destroyed by the State authorities and when the same was not disputed by the Central Excise authorities, it cannot be said that the same was removed by the appellants in contravention of Rule-9(l) of the Central Excise Rules read with Rule-49. Therefore, the demand of duty and imposition of penalty in the above-said case is not warranted on the facts and circumstances of the case, and accordingly, we set aside the same. This appeal is allowed. Further, at page-276 of the same decision reported in 1992 (58) E.L.T. 270 (Tribunal), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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