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TMI Blog1991 (6) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... oved molasses in contravention of Rule 9(1) of the Central Excise Rules, read with Rule 49 and also imposed a penalty of Rs. 3,000/- under Section 173Q of the Central Excise Rules, 1944. The appeal against this order filed before the Collector (Appeals), Central Excise, Calcutta, was dismissed by an order dated 28-2-1985 in order No. 113/BR/85. 4. Appeal No. E-85/85 Cal. is directed against order in appeal No. 626-BR/84 dated 13-12-1984 passed by the Collector of Central Excise (Appeals), Calcutta, wherein he dismissed the appeal filed by the appellant against order of the Assistant Collector. The Assistant Collector by virtue of his order No. 7184 dt. 29th April, 1984 had confirmed the demand of duty of Rs. 73,449.02 on the ground that 23,317.15 qtls.of molasses were removed by the appellants in contravention of Rule 9(1) and 9(2) of the Central Excise Rules read with Section 11A of the Central Excises Salt Act, 1944. He also imposed a penalty of Rs. 2,000/- on the appellant under Rule 173Q of the Central Excise Rules, 1944. 5. In all these appeals the appellant had filed an application for amendment of the appeal grounds which was registered as M.A. 228/90, M.A. 228A/90 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore contended before us that, when the approval was withdrawn suddenly on 1-10-1982 there was no other alternative and the duty cannot be demanded under Rule 9(2) of the Central Excise Rules. It was his contention that these molasses have become unfit for use and they were drained out. It was also contended that the Government of Bihar was forcing the appellants to crush more sugarcane under compulsion, though they had no storage capacity for storing molasses. It was also contended that the Collector of Central Excise in spite of this fact did not allow them for the destruction of old molasses lying in the kutcha pits. It was contended that the storage of molasses was allowed by the Central Excise authorities from the year 1975, and these pits were also approved along with the factory plan on 31-7-1980 and as such, there was huge backlog lying in kutcha pits till its disapproval on 1-10-1982. It was his contention that the Bihar State Government Excise Authorities are only competent to clear the molasses by issuing a permit to the allottees. Therefore, the appellants cannot do anything in the matter. He also contended that these molasses were destroyed in the presence of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without payment of duty. In the material portion of his order, he stated as follows : On top of that the appellants had destroyed the excisable commodity, namely, molasses without the approval of the Central Excise authorities . But in this case the appellants had destroyed the molasses in the presence of the Excise Officers of the Bihar Government. But the learned Collector (Appeals) had stated that when the permission to store the same in kutcha pits was withdrawn on 1-10-1982 and in view of that withdrawal, there was a constructive removal of the molasses from the approved place of storage. He, therefore, came to the conclusion that the demand is justified. We are unable to agree with this reasoning of the learned Collector (Appeals). In this connection we refer to the decision of the Tribunal reported in 1987 (29) E.L.T. 22. In that decision the Tribunal at pages 36 and 37 at para 46 observed as follows: In appeals ED(Bom.) 197784, ED(Bom.) 68/85, ED(Bom.) 103 to 105/85 and ED(Bom.) 187/85, the appellants have produced documentary proof by way of certificates issued by the State Government agencies that the molasses stored in katcha pits after testing in the laboratorie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 13. As far as appeal No. E-165/85 is concerned, the learned Collector stated that the approval for storing the molasses in the kutcha pits was withdrawn on 1-10-1982 by the Assistant Collector. The department had allowed the storage since 1975, and these pits were also approved along with the factory plan on 31-7-1980. But suddenly there was a disapproval for storing the same in the kutcha pits by virtue of an order of the Assistant Collector dated 1-10-1982. During the time of adjudication against the total demand of Rs. 80,199/- on 25,460 quintals of molasses, the appellant had already cleared 20,000 quintals on payment of duty of Rs. 63,742/-. This was also mentioned by the learned Collector (A). But the learned Collector (A) stated that the contentions of the appellant cannot be considered. He held that the molasses relate to sugar for the year 1983-84, and that the approval of storage of molasses in the kutcha pits was cancelled by the Assistant Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the excise duty leviable on those goods. Rule 49 is a direction to the Excise authorities that the payment of excise duty shall not be demanded until excisable goods are about to be issued out of place or premises specified under Rule 9 or are about to be removed from a store-room or other place or storage approved by the Collector under Rule 47". Thus, the point of time when duty must be paid or may be collected is clearly given. Similarly, it is provided that there must be removal from the specified place to attract the payment of duty. If there is no removal there would be no question of payment. Removal is a positive act and cannot have any reference to disappearance of the product. For example, evaporation would not be removal for that takes place by natural causes in the process of manufacture or even afterwards. Similarly, waste or product while in the pipeline or in storage may take place on account of natural causes or otherwise. In Synthetic and Chemicals Ltd. v. Govt. of India - 19.80 (6) E.L.T. 675 (Del.) the Division Bench of the Delhi High Court ruled that Rule 49 merely provides that no excise duty shall be levied until the goods are about to be issued out of the pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, the Supdt. of the State Excise, Bettiah had drained out the remaining molasses from the factory and such a report was also made by him. That report is produced in page 8 of the paper book. In that report he had stated that as per Govt. letter No. 1/1-AI-6-1018-81/E dated 13-10-1981 he got the balance molasses destructed before him. This fact was also pointed out before the lower authorities. But the same was disbelieved. The learned Assistant Collector stated that there were no such molasses lying to drain out the same. But when a State Government authority had made such an observation and a certificate to that effect was given by him, there was no reason to discard the same without making any verification in this behalf. So also the Supdt. of Bettiah on 4-6-1986 had given another report stating that the molasses were destroyed by mixing soil and boiler ash. All these things clearly go to show that the molasses had become unfit for use and they were destroyed by the State authorities. But the learned JDR, Shri Chowdhury stated that the Central Excise authorities were not informed of the same. However, the fact remains that the State authorities were informed of the same. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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