2000 (11) TMI 828 - AT - Central Excise

Summary

Issues Involved:
Application for draining out deteriorated Molasses stored in Kutchcha pits without permission leading to duty remission rejection.

Analysis:
The appellants, engaged in sugar manufacturing, faced a situation where molasses, a by-product, stored in Kutchcha pits deteriorated in quality due to delay in allotment by State Government Officers. Efforts to sell the molasses proved futile, prompting an application for draining them out. The State Government Controller permitted draining after analysis revealed unsuitability for consumption. Subsequent application to Central Excise Authorities faced prolonged inquiry culminating in rejection based on various grounds, including lack of permission from the Commissioner for destruction, unsupervised draining, violation of rules, and storage at the appellants' risk.

The Commissioner (Appeals) upheld the rejection citing non-permission for draining and unsupervised operations, leading to violations of Rules 47 and 49. However, the judgment by Shri S.S. Sekhon, J., overturned the lower authorities' decisions. It was reasoned that the Collector's order held no force as an Addl. Collector falls under the definition of a Collector. The appellants, being in Special Relief Package (SRP), were entitled to remove deteriorated molasses for agricultural purposes, preventing hazards and stockpiling of unusable molasses. The judgment emphasized the necessity of draining out the pit, considering the agricultural use of molasses as fertilizer and manure.

Furthermore, the judgment highlighted that the objections raised by lower authorities regarding the removal of molasses as fertilizer without proper documentation were not substantiated. Citing relevant legal precedents, the judgment deemed the case suitable for granting remission of duty. It concluded that no valid reasons supported the lower authorities' orders, emphasizing the need for determining remission applications and considering the clearance of molasses as fertilizer. The judgment allowed the appeal on specified terms, directing the recovery of duty as fertilizer or manure and refunding any excess paid under protest by the appellants.