Remission pending on the same duty demand makes adjudication premature; approved kutchha pits also preserved Tribunal jurisdiction.

Where a remission request concerning the same excisable goods and duty demand remained pending before the competent authority, adjudication on the identical demand was premature and not maintainable; the demand and penalty proceedings were therefore quashed. On jurisdiction, goods stored in kutchha pits approved by the jurisdictional Superintendent could not be treated as lying outside the factory so as to trigger the exclusion in the first proviso to Section 35B(1) of the Central Excise Act, 1944; the objection to Tribunal jurisdiction was rejected. The appeal succeeded and the proceedings were set aside as not maintainable.

---

---

Issues: (i) Whether the demand and penalty proceedings were premature and not maintainable when the assessee's request for remission of duty on molasses destroyed by spontaneous combustion was pending before the Commissioner. (ii) Whether the Tribunal lacked jurisdiction under the first proviso to Section 35B(1) of the Central Excise Act, 1944 on the ground that the goods were stored in kutchha pits without prior permission.

Issue (i): Whether the demand and penalty proceedings were premature and not maintainable when the assessee's request for remission of duty on molasses destroyed by spontaneous combustion was pending before the Commissioner.

Analysis: The request for remission related to the same quantity of molasses and the same duty demand that formed the subject-matter of the show cause notice and the adjudication proceedings. Since the remission application was still pending before the Commissioner, the matter had already been seized at the higher administrative level under the relevant excise remission framework. The same issue could not validly be decided simultaneously by the adjudicating authority while the remission request remained undecided.

Conclusion: The proceedings were held to be premature and not maintainable, and the impugned order was quashed.

Issue (ii): Whether the Tribunal lacked jurisdiction under the first proviso to Section 35B(1) of the Central Excise Act, 1944 on the ground that the goods were stored in kutchha pits without prior permission.

Analysis: The kutchha pits were found to have been approved within the factory premises by the jurisdictional Superintendent. On that factual basis, they could not be treated as lying outside the factory so as to attract the jurisdictional exclusion in the first proviso to Section 35B(1).

Conclusion: The preliminary objection to the Tribunal's jurisdiction was rejected.

Final Conclusion: The appeal succeeded, the proceedings were set aside as not maintainable, and the Tribunal retained jurisdiction to entertain the matter.

Ratio Decidendi: Where a remission request concerning the same excisable goods and duty demand is still pending before the competent authority, adjudication on the identical demand is premature and not maintainable.

---