2001 (11) TMI 767

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....s, Jammu and M/s. New India Distilleries, Jammu against two separate orders passed by the adjudicating authority against the two above-mentioned appellants dated 21-10-99 and 24-9-99 respectively. 3. The respondents are distillery units which are engaged in the manufacture of Alcohol. They are also engaged in processing Khandsari molasses procured from the Khandsari (sugar) Mills for use in the manufacture of Alcohol Rule 7A of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) was inserted by the Central Excise (Amendment) Rules under Notification No. 6/97-C.E. (NT), dated 1-3-97. This rule related to the recovery of duty on molasses produced by Khandsari sugar factory. It provided that every person who procures mo....

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....ed to provide small scale industries exemption to the procurers of Khandsari molasses which was to be used in the manufacture of non-excisable alcohol. Reference was made to the provisions contained under Notification No. 7/97, dated 1-3-97 and it was held that a procurer of Khandsari molasses cannot satisfy the conditions contained under Notification No. 7/97 as a matter of fact. Manufacturing molasses in a factory is a basic requirement to apply notification. Reliance was placed by the Bench on the decisions of the Supreme Court in Commissioner of Sales Tax v. Modi Sugar Mills Ltd. - 1961 (12) STC 182 (SC), Karim Tharauvi Tea Estate v. State of Kerala - 1966 (60) ITR 262 (SC) and State of Maharashtra v. Laljit Rajshu Shah & Others - 2000 ....