Tribunal rules no duty for stored molasses under State Excise control

The Tribunal allowed the appeal, ruling that duty cannot be demanded for molasses stored in a kuchcha pit within the factory premises, as long as the molasses remains under the control of State Excise and has not been removed without permission. The demand for duty on the stored molasses was considered unjustified, and the penalty was overturned.

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Issues: Appeal against demand confirmed for storing molasses in kuchcha pit without following circular.

Summary:
The appellant, engaged in sugar manufacturing, stored molasses in a kuchcha pit during the sugar season. A show-cause notice was issued demanding duty on the stored molasses and imposing a penalty. The appellant contended that a portion of the molasses was cleared on payment of duty, and the remaining quantity within the factory should not be subject to duty. The appellant also cited a precedent to support the argument that duty cannot be demanded for molasses stored in a kuchcha pit inside the factory.

The Revenue argued that storing molasses in violation of the circular justified the duty demand, claiming that the molasses became ready for sale in the kuchcha pit without the required permission from State Excise. However, the Tribunal found that duty cannot be demanded solely for moving molasses to a kuchcha pit for storage within the factory, especially when the molasses is still under the control of State Excise and has not been removed without permission. Therefore, the demand for duty on the molasses still within the factory was deemed unsustainable, and the appeal was allowed.

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