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TMI Blog2012 (10) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... olasses appellant have inside their factory premises 2 steel tanks and one covered masonry tank with aggregating storage capacity of 83,000 qtls. duly approved by the department which is quite sufficient during normal periods. However, during crushing season 2002-2003 there being low demand/lifting in comparison to high production of molasses stocks piled up and all the 3 tanks became full beyond their capacity in April, 2003 containing the molasses as detailed below though the crushing and production were still going on. iii) That storage and disposal of molasses being fully controlled by the State Controller of Molasses under Rule 22(1) of U P Sheera Niyantran Niyamvali, 1974 all the stocks of molas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of close of season and on date aggregating 1,00,585.93 qtls., according to which the balance in kachcha pit at the time of close of season was 18262.80 qtls. out of which only 222.10 qtls. could be lifted in August, 2003 leaving a balance of 18040.70 qtls. Apprehension of deterioration of molasses due to rains was also mentioned. vi) Earlier a SCN dt. 1.4.2004 had been issued to demand duty of Rs.9,13,140.00 leviable on 18262.80 qtls. of non-duty paid molasses stored in kachcha pit. Joint Commissioner, Central Excise, Allahabad had dropped the demand with the observation that no molasses was cleared from the factory. However, nominal penalty of Rs. 5,000,00 was imposed under Rule 27 for contravention of CBEC Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .8.2006 to remit the duty thereon before Commissioner, Central Excise Allahabad in which their plea that the said stock due to evaporation, dryage and seepage reduced to 750 qtls. and become completely unfit for consumption is believable because from 21.4.03 to 07.05.04 and 06.06.2004 it remained intact but evaporated/lost in 4 months. b) From the above it appears that party have removed 16055.95 qtls. molasses clandestinely without payment of duty violating the Rule 4, 6, 8 and 11 of Central Excise Rules, 2002 and mis-stated the facts to their own suitability. They have produced a concocted story and applied for remission of duty leviable thereon. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lasses is controlled by UP Sheera Niyantran Adhiniyam, 1964 and manufacturer again cleared the goods beyond the State Supervision and Promotion by the State Controller of Molasses. I find that there is absolutely no evidence on record reflecting upon clandestine removal of the goods. It has been held in number of decisions, as detailed below that where the molasses are stored in katcha pits and are unfit for consumption their destruction has to be allowed. i) Kisan Sahkari Chini Mills Ltd. vs. CCE, Meerut - [2008 (227) ELT 538 (Tri-Del)] "Remission of duty - Destruction of molasses stored in Kachcha pits - Goods in question not usable - Rejection of remission application on gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Such condition not acceptable since no sane person would volunteer to get his goods destroyed unless there is some ulterior motive - No such motive has been attributed - Remission of duty available under erstwhile Rule 49 of Central Excise Rules, 1944." v) UP State Sugar Corpn. vs. CCE, Allahabad [1999 (107) ELT 674 (Tri)] "Demand - Removal of molasses to kachcha pit inside the factory without approval of Central Excise authorities - Kachcha pit though not approved for storage of molasses, no duty can be demanded so long as the goods remain in the factory in terms of Rule 9 read with Rule 49 of Central Excise Rules, 1944 - Collectorate Instruction 1/88, dated 1-9-1988 beyond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fide act - Molasses in steel tanks did not suffer much damage although same weather conditions prevailed - Temperature level in steel tanks which were covered different from temperature level in open pit - Appellants entitled to remission of duty on 15.651 qtls. - Liability to be re-determined accordingly - Rule 21 of Central Excise Rules, 2002." viii) UP State Sugar Corpn. vs. CCE, Allahabad [2004 (166) ELT 71 (Tri-Del)] "Remission of duty - Molasses of high quality - Accidentally seeping from an approved steel tank into a pit and getting mixed with that of lower quality - Department alleging failure to provide secure storage but not pointing out where that failure occurred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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