In-factory transfer of molasses to unapproved pits did not amount to removal, defeating duty demand and penalty.

Storage of molasses in unapproved katcha pits inside the factory premises did not amount to removal from the factory for duty purposes. The molasses were shifted within the factory and duty was paid when they were later cleared from the premises, so the transfer itself was not a contravention on the facts found by the appellate authority. The demand and penalty were therefore not sustainable.

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Issues: Whether storage of molasses in unapproved katcha pits situated within the factory premises amounted to removal from the factory so as to attract duty and penalty.

Analysis: The molasses were shifted to katcha pits that were within the factory premises, and the clearance of the stored molasses was made on payment of duty as and when they were removed from the factory. Since the pits were inside the factory, the transfer did not amount to removal from the factory, and no contravention of law was made out on the facts found by the appellate authority.

Conclusion: The transfer to the unapproved katcha pits did not constitute removal from the factory, and the demand and penalty were not sustainable.

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