TMI Blog1983 (4) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... e product and has no or very little value and as such is stored in the open in the factory premises so that after it dries up, it can be used as fuel in the boilers, which user is pleaded to be as a convenient mode of destruction of the waste material. 3. It was pleaded that after Item 68 was introduced in Central Excise Tariff with effect form 1-3-1975, the company filed a classification list showing molasses against the entry in column 5 of the format of the classification list under the heading : All other goods . Excise duty was paid accordingly on molasses only. However, on 20-4-1977 the Superintendent, Central Excise, Saharanpur, within whose jurisdiction the factory fell, served a show cause notice on the company, requiring cause to be shown as to why duty amounting to ₹ 16,276.92, be not recovered on account of bagasse valued at ₹ 16,27,692.30, cleared form the factory. Its price was computed at the rate of ₹ 10 per quintal and has been allegedly used in the factory during the period 1-3-1975 to 29-4-1975. The notice was issued on the view that it was not an intermediate product or a component product used in the factory of production, within the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khandsari factory who purchased that short quantity of bagasse from M/s. Rosa Sugar Works of M/s. Oudh Sugar Mills because of some urgency. It was thus pleaded that this stray transaction could not be made a basis for determining the manufacturing cost of this item, known as bagasse. Although they had placed on record another decision of the Appellate Collector where ₹ 5/- per quintal has been accepted in respect of large number of factories in a collective order-in-appeal Nos. 618 to 522-C.E/77, dated 25-4-1977, the same has been ignored. 7. It was further pleaded in that the quantity has also been wrongly worked out and computed because it was apparent that quantity of bagasse as entered in the stocks and other records was of fresh material which contained high degree of moisture whereas to be termed as bagasse and used as fuel in the boiler, all the water stands evaporated and as such the natural evaporation has to be allowed and that in spite of the fact that all material was placed before the Appellate Collector to show as to what was the water content of bagasse as entered in RT 7(c) of the return, the Appellate Collector erred in observing that said form did not ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the wet weight content as well as the computation of price. 11. Shri Hem Prakash, Departmental Representative refuted all these arguments in reply, by emphatically contending that bagasse was not a mere waste but a definite product having a distinct trade name and that the case of cotton seed cited on behalf of the appellant was distinguishable inasmuch as there only separation was involved whereas in the case of bagasse it was extraction and it was a product having utility inasmuch as it was not only being used as a fuel but also for the purpose of manufacture of paper products as a raw material. As regards the plea of time-bar he contended that deletion was effective with effect from 6-8-1977 whereas action had been initiated prior to that and as such rule 10A was fully applicable so far as these two proceedings were concerned. He also contended that rate could not be uniform and as such the dispute raised in regard to value was also not sustainable, nor the dispute as to the moisture factor. 12. We have given our very careful thought to these questions raised in this appeal. The foremost question to be determined is the excisability of the goods because that goes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared and although molasses and press-mud are shown therein, there is no indication or mention of bagasse. It is thus not a case where goods had been indicated and averred to be non-excisable to which the Excise Authorities might have acquiesed at the time, by applying `nil rate of duty, and thus the ratio of judgment of the Hon ble Supreme Court in Elphinston Spinning and Weaving Mills case would not be attracted and Rule 10 would not apply in the circumstances. 17. We also find the plea as to the non-applicability of Rule 10A to be not tenable because as per grounds of appeal, notice to show cause was admittedly received by the appellant on 20-4-1977. The proceedings definitely are to be taken to have been initiated as soon as the show cause notice is served and subsequent repeal or deletion of Rule 10A which took place with effect from 6-8-1977 would not affect these proceedings. We, therefore, do not find it possible to concede to the contention that rule 10A had ceased to be applicable by the time the impugned order of the Assistant Collector came to be passed because for this purpose, the relevant time would be the time of issue of show cause notice. The contention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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