Approved storage for excisable goods is mandatory; unapproved molasses pits attracted central excise duty.

Molasses had to be stored only in a storage place approved by the excise authorities, and storage in earthen pits and masonry tanks within the factory without such approval did not comply with the prescribed mode. Under Rule 47 and Rule 49 of the Central Excise Rules, 1944, excisable goods kept contrary to the approved storage arrangement, or not accounted for in the prescribed manner, became liable to duty. The Board's circular had withdrawn permission for such storage except as allowed by the rules, and the prior judicial view confirmed that removal from the place of production attracted duty. Central excise duty was therefore payable on the molasses, and the demand was sustained.

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Issues: Whether central excise duty was payable on molasses stored in earthen pits and masonry tanks within the factory premises without approval of the prescribed storage place.

Analysis: Molasses, though manufactured within the factory, had to be kept only in the storage place approved by the excise authorities. The assessee's request to store the goods in earthen pits and masonry tanks had been ed, and the Board's circular had withdrawn permission for such storage except in the manner permitted by the rules. Under Rule 47 and Rule 49 of the Central Excise Rules, 1944, excisable goods must be stored in an approved place and duty becomes demandable where the goods are not accounted for in the manner prescribed or are kept contrary to the approved mode. The prior judicial view, affirmed by the Supreme Court, held that excisable goods removed from the place of production are liable to duty and that storage in an unapproved manner does not avoid the levy.

Conclusion: Central excise duty was payable on the molasses stored in the unapproved earthen pits and masonry tanks, and the demand was sustained against the assessee.

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