Actual physical removal governs excise duty on molasses; book entries alone do not fix the duty rate or avoid confiscation.

Central Excise duty on molasses was held to depend on actual physical removal from the factory, not on a mere book transfer or change of ownership. The applicable rate was therefore the rate in force on the date of actual removal, and the conditional exemption could not be claimed unless the goods were removed for the specified captive-consumption purpose. The stock was also held liable to confiscation and redemption fine because the assessee failed to prove that the department knew of, or acquiesced in, the alleged book-transfer practice; State Excise endorsements and nil-rate returns could not override the Central Excise requirements.

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Issues: (i) Whether book transfer of molasses without physical removal from the factory constituted removal for the purpose of Central Excise duty and fixed the relevant rate of duty on the date of such actual removal. (ii) Whether the stock of molasses was liable to confiscation and redemption fine in the absence of proof that the Central Excise department had knowledge of and acquiesced in the alleged book-transfer practice.

Issue (i): Whether book transfer of molasses without physical removal from the factory constituted removal for the purpose of Central Excise duty and fixed the relevant rate of duty on the date of such actual removal.

Analysis: Central Excise duty is attracted on manufacture, but assessment and collection are postponed until removal or clearance from the place of manufacture. Transfer of ownership, by itself, is not material for this purpose. The record did not establish that the goods were physically removed when the entries were made, nor that the Central Excise officers had been informed of any practice by which book adjustments were to be treated as removals. The exemption relied upon was also conditional and operated only when the goods were removed for the specified captive-consumption purpose. Accordingly, the applicable duty rate was the rate prevailing on the date of actual removal.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether the stock of molasses was liable to confiscation and redemption fine in the absence of proof that the Central Excise department had knowledge of and acquiesced in the alleged book-transfer practice.

Analysis: The appellants failed to establish departmental knowledge or consent to the asserted practice. Mere endorsement by State Excise authorities, or assessments at nil rate in returns, could not override the statutory requirements under the Central Excise law. In the absence of proven acquiescence, the prescribed procedure had to be followed, and no extenuating circumstance was shown to displace the orders of confiscation and redemption fine.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The appeals were not sustainable in law, and the duty demand, confiscation, and redemption fine were maintained.

Ratio Decidendi: For central excise purposes, duty liability and the operative rate depend on actual physical removal from the factory, not on mere transfer of ownership or book entries, and confiscation may be sustained where the assessee fails to prove departmental knowledge or acquiescence to a contrary practice.

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