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TMI Blog2001 (11) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority against the two above-mentioned appellants dated 21-10-99 and 24-9-99 respectively. 3. The respondents are distillery units which are engaged in the manufacture of Alcohol. They are also engaged in processing Khandsari molasses procured from the Khandsari (sugar) Mills for use in the manufacture of Alcohol Rule 7A of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) was inserted by the Central Excise (Amendment) Rules under Notification No. 6/97-C.E. (NT), dated 1-3-97. This rule related to the recovery of duty on molasses produced by Khandsari sugar factory. It provided that every person who procures molasses in a Khandsari sugar factory, whether directly from such factory or otherwise, for use in the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacture of non-excisable alcohol. Reference was made to the provisions contained under Notification No. 7/97, dated 1-3-97 and it was held that a procurer of Khandsari molasses cannot satisfy the conditions contained under Notification No. 7/97 as a matter of fact. Manufacturing molasses in a factory is a basic requirement to apply notification. Reliance was placed by the Bench on the decisions of the Supreme Court in Commissioner of Sales Tax v. Modi Sugar Mills Ltd. - 1961 (12) STC 182 (SC), Karim Tharauvi Tea Estate v. State of Kerala - 1966 (60) ITR 262 (SC) and State of Maharashtra v. Laljit Rajshu Shah Others - 2000 AIR SCW 698 wherein it has been held that legal fiction must be limited to the purposes for which it has been cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturer is incorporated only for the purpose of collection of the duty. All consequences which are incidental to the legal fiction would be only those aspects relating to the recovery of the duty. If we accept the contention of the appellant, we will be extending the legal fiction to an area of exemption to small scale industries which was never the intention of the amendments carried out in Rule 7A and the amendments to Rule 9. On the other hand, it is clear from the wording of the Notification No. 7/97 which has been quoted in full in the decision in [2001 (128) E.L.T. 390 (T) = 2001 (43) RLT 917] that a procurer of Khandsari molasses would not come within the scheme of the notification at all. 6. We find that the dictum in Sher Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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