Molasses stored within factory premises in a kutcha pit was not treated as removal attracting excise duty under Rule 9.

Storage of molasses within the factory premises in a kutcha pit, caused by lack of tank capacity and regulated lifting by the State Excise Department, did not amount to removal or consumption as such under the Explanation to Rule 9 of the Central Excise Rules. Because the facts did not show storage outside the factory or removal for use in the manufacture of another product, the departmental demand for duty was not sustainable and the assessee's relief was maintained.

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Issues: Whether molasses stored in a kutcha pit within the factory premises could be treated as removed so as to attract duty under Rule 9 of the Central Excise Rules.

Analysis: The molasses was stored in a kutcha pit because the tanks had no available capacity, and the lifting was regulated by the State Excise Department. The facts did not show storage outside the factory premises or removal for use in the manufacture of another product. On these facts, the storage did not amount to consumption as such or removal within the mischief of the Explanation to Rule 9. The reasoning supporting the departmental demand was therefore not accepted.

Conclusion: The demand of duty on the molasses stored in the kutcha pit was not sustainable, and the assessee succeeded.

Final Conclusion: The departmental appeal failed and the order granting relief to the assessee was maintained.

Ratio Decidendi: Storage of molasses within the factory premises in a kutcha pit, occasioned by lack of tank capacity and without removal for manufacture or outside the factory, does not constitute removal attracting duty under Rule 9.

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