TaxTMI 
TaxTMI 
1999 (12) TMI 219
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....00 Qtls., in their letter dated 28-9-1995. The Department proposed to recover an amount of Rs. 1,07,695/- as Central Excise duty on the said quantity of 11,900 Qtls. of molasses, alleging that the appellants had removed the said quantity of molasses clandestinely and/or had submitted false statement in order to evade payment of Central Excise duty. The Department also proposed to take penal action against the appellants for alleged contravention of Rules 9, 45/52, 52H, 53, 173Q and 198 of the Central Excise Rules. The appellants contested the proposed action of the Department by way of their reply to the show cause notice. The dispute was adjudicated upon by the jurisdictional Assistant Commissioner of Central Excise who confirmed the duty-....
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....mer season had subsided and consequently the measurements by the dip-reading method yielded a figure of stock of molasses as low as 12,200 Qtls., which meant a shortage of 11,900 Qtls. of molasses in the tank. When the Central Excise Officers themselves checked the stock of molasses in the tank on 12-2-1995 by the dip-reading method, they had found an excess of 1263.44 Qtls. of molasses over and above the recorded balance. Again on 30-3-1995, the Central Excise Officers checked the stock of molasses in the tank and found an excess of 3000 Qtls. over and above the recorded balance. Later on, the appellants themselves checked the stock on 4-5-1995 and detected an excess of 10,418.27 Qtls. over and above the recorded balance. Thus, there is a ....
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....he learned Advocate has submitted that there was no evidence whatsoever in support of the Department's allegation that the quantity of molasses found short was clandestinely removed. He has further submitted that none of the lower authorities has reached a finding of clandestine removal against the appellants. In this connection, the learned Advocate has relied on the decisions of the Tribunal in the case of Icycold Commercial Enterprise v. C.C.E. [1994 (69) E.L.T. 337 (T)] and in the case of Madhu Food Products v. C.C.E., Hyderabad [1995 (76) E.L.T. 197 (T)]. In the former decision, the Tribunal had held that clandestine removal was a positive act and the burden of proving the same was on the Department. In the latter case, it was held tha....
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.... drawn my attention to the decision of the Tribunal in the case of Ghatampur Sugar Company Limited v. Collector of Central Excise, Kanpur [1996 (85) E.L.T. 69 (T)]. In Ghatampur Sugar Compay Limited, the factum of foaming had been admitted by the adjudicating authority. The Tribunal, therefore, found that, because of foaming process, the dip-measurement would not invariably give very accurate indication about volume specifically converted into weight. After perusal of literature regarding the behaviour of molasses on prolonged exposure to atmosphere, the Tribunal observed that the weight obtained through volumetric basis particularly when volume will depend on temperature and steam would not always be accurate. The Tribunal had further held....
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.... of clandestine removal either in the order of adjudication or in the order passed by the Commissioner (Appeals). For this very reason, the demand raised on the appellants for Central Excise duty cannot be sustained. It is also pertinent to note that the appellants are a public sector undertaking. It is improbable that such an organisation would indulge in clandestine activities. In this view of the matter, the burden is all the more heavy on the Department to establish the veracity of the allegation of clandestine removal against the appellants. I find that the Department has failed in this behalf. 7. The demand of duty for a quantity of 11,900 Qtls. of molasses is based on the shortage detected by the appellants themselves by way ....