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BIDAR SAHAKARA SAKKARE KARKHANE LTD. Versus COMMR. OF C. EX., BELGAUM

2010 (6) TMI 749 - CESTAT BANGALORE

Demand of duty - whether the clearance of 9991.20 MTs of molasses to katcha pits within the factory premises from the steel tanks installed in the factory amounts to removal and whether they are liable to pay the Central Excise duty on the molasses stored in katcha pits? - E/831/2008 - Final Order No. 1173/2010 - Dated:- 10-6-2010 - Shri M.V. Ravindran, Member (J) and P. Karthikeyan, Member (T) Shri Pradyumna, G.H., Advocate, for the Appellant. Ms. Sudha Koka, SDR, for the Respondent. ORDER This .....

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r C.B.E.& C. Circular dated 22-10-1992, pertaining to the storage of molasses in katcha pit and no permission should be given to store the molasses in katcha pit. Entertaining such a view, the lower authorities have considered the clearances of molasses to katcha pit would amount to removal from the factory and therefore duty liability arises on the appellant. On such premise, show cause notice dated 1-4-2008 was issued to the assessee demanding a duty of ₹ 74,93,400/-, Education Cess .....

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not cleared to any buyer, and on the clearances made from the katcha pit, they had discharged the duty liability. The Adjudicating Authority, after granting an opportunity of personal hearing, did not agree with the contentions raised by the assessee and vide the impugned order, had confirmed the demand of the duty, demanded interest and also imposed penalty under the provisions of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. Aggrieved by such .....

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this case is April, 2007 and provisions of Rule 4 of the Central Excise Rules, 2002 would be applicable, which contemplates for payment of duty only at the time of removal of goods from the place where they are produced or manufactured or from the warehouse. He would submit that charge of suppression will not survive as proper accounting has been done in the Daily Production Account and facts were disclosed to the Revenue authorities vide letter dated 2-5-2007. It is his submission that the app .....

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ervices Corp. India Pvt. Ltd. v. CC, Bangalore [2009 (245) E.L.T. 661 (Tri.-Bang.)] for the proposition that the goods becoming unusable for some reason or other to be taken as destroyed and remission is to be allowed, if applied for. 4. Ld. SDR would submit that the Board s circular dt. 1-8-1988 clearly indicates that sugar factories were permitted to store molasses in katcha pits and tanks subject to execution of bond that in the event of loss or damage, whether for natural causes or othe .....

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sions made at length by both sides and perused the records. 6. The issue involved in this case is whether the clearance of 9991.20 MTs of molasses to katcha pits within the factory premises from the steel tanks installed in the factory amounts to removal and whether they are liable to pay the Central Excise duty on the molasses stored in katcha pits. 7. It is seen that there is no dispute that molasses on which the duty liability has arisen was stored in the katcha pits within the fact .....

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antity of 9991.20 MTs of molasses in katcha pits would be incorrect and needs to be held as unsustainable. 8. Be that as it may, we find that the provisions of Rule 4 of the Central Excise Rules, 2002 gets attracted in this case for the discharge of the duty liability by the assessee. In order to appreciate the correct provisions of law, for discharge of the duty liability by an assessee, we reproduce provisions of Rule 4 of the Central Excise Rules, 2002, which is under :- Rule 4. Duty pay .....

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e produced in a khandsari sugar factory, the person who procures such molasses, whether directly from such factory or otherwise, for use in the manufacture of any commodity, whether or not excisable, shall pay the duty leviable on such molasses, in the same manner as if such molasses have been produced by the procurer. Notwithstanding anything contained in sub-rule (1), (4) Commissioner may, in exceptional circumstances having regard to the nature of the goods and shortage of storage space at th .....

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