1994 (7) TMI 149

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....lants. Shri B.D. Bhagat, JDR, for the Respondent. [Order per : Jyoti Balasundaram, Member (J)]. -  The above appeal arises out of the order of the Additional Collector of Central Excise, Allahabad confirming a demand of Rs. 30,491.68 on 4839.95 quintals of molasses of the 1985-86 sugar year production, drained out from kutchha pit No. 3 without payment of duty, and imposing a penalty....

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....n open market. The aggregate bid in the auction for the molasses was Rs.1300/- i.e. only about 27 paise per quintal which was not approved by the appellants' Headquarters at Lucknow. On subsequent dates of auction there was no bid for the molasses. By passage of time, the stock of molasses got deteriorated and became unfit for consumption as well as marketing and the Alcohol Technologist's reports....

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....uducating authority confirmed the demand and imposed a penalty. Hence this appeal. 4. There is no dispute in this case that the molasses were actually unfit for marketing and consumption and were actually drained out. Show cause notice proceeds only on the basis that the appellants did not sell the deteriorated molasses to M/s. Molasses and Spirit Transport Corporation of India, and remove....

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....rted in 1987 (29) E.L.T. 22 the same view has been expressed viz. that loss or deterioration of molasses due to natural causes does not amount to removal and the power to collect duty arises only at the time of removal of the goods. Following the ratio of the above decisions, we hold that the demand of duty is not sustainable and set aside the same. The penalty is also not warranted in view of the....