Clandestine removal and molasses storage: in-factory storage without prior permission did not justify a duty demand.

Storage of molasses in kachcha pits within the factory premises, within the context of allotted tank capacity, did not by itself constitute clandestine removal. The absence of prior permission under the Central Excise Rules for such storage was not sufficient to treat the movement or storage as concealed clearance, and procedural non-compliance alone could not sustain a duty demand on that basis. The demand of duty was therefore not sustainable.

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Issues: Whether storage of molasses in kachcha pits within the factory premises could be treated as clandestine removal and whether prior permission under the Central Excise Rules was necessary.

Analysis: The storage was within the factory premises and was controlled in the context of the allotted tank capacity. The absence of prior approval for such storage did not, by itself, convert the movement or storage of molasses into clandestine removal. The objection that the respondent should have followed the prescribed procedure before storing the molasses did not justify confirmation of duty on the basis of clandestine removal.

Conclusion: Storage of molasses in kachcha pits within the factory premises did not amount to clandestine removal, and the demand of duty was not sustainable.

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