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TMI Blog1998 (12) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice dated 4-4-1989 asking the appellants to show cause as to why basic duty of Rs. 1,54,454.29 and special duty of Rs. 9,972.74 should not be demanded from them in terms of provisions of Rule 9(2) read with Rule 49 of the Central Excise Rules 1944 as well as Section 11A of Central Excise Act, 1944. 1.3 In reply the appellants herein submitted that the said quantity of molasses produced during the year 1986-87 was lying stored in approved pucca tank No. 3 which could not be cleared due to non-lifting by the allottee distilleries inspite of repeated requests despite the fact that they had been conveying through letters the latest stock position, storage problem and apprehension of deterioration of molasses resulting into financial loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of steel tanks for storage of molasses, the sugar mill was permitted to store molasses in kachcha pit on their request subject to the execution of bond that in the event of loss or damage either due to natural cause or otherwise the party (the appellants herein) would pay Central Excise duty on such molasses and not claim remission thereof under Rule 49 of the Central Excise Rules, 1944. This facility was withdrawn by the department by Central Excise Collectorate, Allahabad s Instruction No. 1/88, dated 1-9-1988 which envisaged that sugar factories will no longer be permitted to store molasses in kachcha pits. This instruction was given vide publicity to all the concerned units. 1.7The adjudicating authority found that the appellants drai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugar. It was fully under control of the State Excise authorities under the provisions of U.P. Sheera Niyantran Adhiniyam, 1964 and Niyamavli Rules, 1974. According to the terms of the provisions of the said Act and the Rules, the appellants are not empowered to remove even a gram of molasses otherwise than in accordance with an order from State Controller of Molasses. In the facts and circumstances of the case, molasses remained within the factory because the alleged distilleries did not remove the same despite the necessary orders from the State Controller. He pointed out that the appellants in their letter dated 23-10-1988 addressed to the State Controller of Molasses with a copy to the Resident Inspector of Central Excise Range brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-1996 in the case of M/s. Kisan Sahkari Chini Mills Ltd. v. CCE, Allahabad. He, therefore, prays for setting aside the impugned order and allow the appeal. 4.1Opposing the contentions, learned JDR, Shri R.S. Sangia has reiterated the findings of the lower authorities. He has submitted that in view of removal of molasses from the place of manufacture to kachcha pits has been prohibited by the Board/Collector without payment of duty, the duty has become liable to be paid. He further submits that the show cause notice has been issued within six months from the date of removal. 4.2In his rejoinder, learned Advocate has again drawn our attention that the subject molasses of 1986-87 sugar season had already deteriorated before its removal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready deteriorated, due to storage over a long period before its removal to the kachcha tank. Therefore, the removal to kachcha tank does not create any further liability on the appellants if the molasses had already deteriorated to an extent that they were unfit for human consumption. The lower authorities have not dealt with this plea specifically taken by the appellants despite his having brought on record his letter dated 23-10-1988 addressed to the State Controller of Molasses with a copy to the Resident Inspector, Central Excise Range. From the said letter it is apparent that the molasses of 1986-87 season had deteriorated to below grade molasses. It is for this reason that the appellants had filed an application in February 1989 befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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