TaxTMI 
TaxTMI 
2011 (3) TMI 814
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....sses stored in the factory premises in the presence of Shri B.M. Nawale, Lab Chemist. It was noticed that in steel tank No. 1 the book balance indicated stock of molasses to be 3569.300 MTs whereas the actual physical balance was only 2999.750 MTs indicating a shortage of 569.550 MTs. In steel tank No. 2 the corresponding figures were 2997.400 MTs, 3092.05 MTs whereby showing an excess quantity of 94.650 MTs. The Lab Chemist who was present could not offer any satisfactory explanation as regards the shortage. (b) A sample of the molasses stored in steel tank No. 1 and No. 2 distillery tanks and katcha pits were drawn and sent for chemical examination. Statement of Shri Dashrath Prahlad Gumphekar, Chief Chemist was recorded on 18-11-1997 wherein he was shown the statement of Shri B.M. Nawale recorded on 9-11-1997 and he also admitted to the measurements and shortages of 569.55 MTs noticed in steel tank No. 1. Statement of Shri V.S. Bhoyate, Managing Director was recorded on 24-2-1998 and he also admitted to the shortages as mentioned above. Reports of the samples tested indicated that the liquid contained in steel tank No. 1 had a TRS of 2.61% whereas thos....
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....ame has been mixed with the molasses stored in katcha pits an equivalent quantity of molasses has been manufactured and utilised in the distillery in the manufacture of ethyl alcohol without payment of Central Excise duty. (e) Accordingly, a show-cause notice was issued to the assessee, M/s. SSSKL demanding duty of Rs. 35,78,650/- under the proviso to Section 11A(l) of the Central Excise Act, 1944; interest on the said amount of duty under Section 11AB of the Central Excise Act; proposing to impose penalty on the company under Section 11AC thereof read with Rule 173Q of the Central Excise Rules, 1944 and also proposing to impose penalties on the Managing Director, Chief Chemist, Dy. Chief Chemist, and the Distillery Incharge under Rule 209A of the Central Excise Rules, 1944, The said show-cause notice was adjudicated by the Commissioner of Central Excise and Customs, Aurangabad vide order No. 02/C.Ex/2001 dated 9-4-2001. The learned Commissioner confirmed the duty amount demanded in the show-cause notice, confirmed the interest liability on the said duty amount under Section 11AB of Central Excise Act, 1944, imposed equal amount of penalty on the company ....
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....s are in handwriting of Shri Rasne, Superintendent of Central Excise and the said officer had put his words in the statements recorded under duress without supplying the copies of the statements. They further submitted that they had filed RT-8(C) return for the season 1996-97, which is the official manufacturing report for the sugar season, which indicates the total hours of working, quantity of cane crushed, quantity of sugar produced, quantity of molasses produced, quantity of bagasse recovered, etc. during the entire period. This is a statutory return filed under the Central Excise Rules. In addition to the above, they had also filed RT-7(C) returns indicating the above particulars on monthly basis under Rule 83 of the Central Excise Rules and these returns have been filed not only before the Central Excise authorities but also to the state excise authorities. A perusal of these returns would indicate that during the season 1996-97 the total molasses produced by them was 12837.283 MTs and the quantity of sugar cane crushed was 3,47,132.115 MTs. If they had produced and cleared molasses for a total additional quantity of 12539.300 MTs, as alleged in the show-cause notice, and sen....
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....port whether the assessee had filed RT-8(C) returns dated 6-6-1997 and, if not, what action was taken for non-filing of returns. The jurisdictional range Superintendent has confirmed that on verification of the office records the assessee had not filed any RT-8(C) return dated 6-6-1997 and no action has been taken against the assessee for non-filing of the said returns. 5. The department's contention is that the assessee has not maintained the books of accounts correctly which has been admitted by various officers of the assessee-company and the samples drawn and test reports thereon clearly indicate that the liquid said to be molasses stored in the steel tank No. 1 and katcha pits had very low TRS percentage and they are unfit for distillation. Accordingly, the quantity of molasses should have been diverted and replaced with some other liquid indicating clear evidence of clandestine production and removal. The department also relies upon a number of judgments in support of their contention, namely, Twenty First Century Wire Rods Ltd. v. Commissioner of Central Excise & Customs, Goa, 2010 (250) E.L.T. 94; Commissioner of Central Excise, Madras v. Systems & Components Pvt. L....
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....s much quantity of sugar can the factory should have worked additionally for about 128 days, which means there will be consumption of electricity, other fuels, employment of workers and payment of wages to these workers. None of these aspects has been gone into by the department while making the allegations raised in the show-cause notice. In the case of Oudh Sugar Mills Ltd. v. Union of India (supra) the Hon'ble Apex Court has held that show-cause notice cannot be issued and duty confirmed based on assumptions and presumptions and the demand of duty cannot be sustained unless there is clear and categorical evidence for removal of goods without payment of duty. There has to be tangible evidence before a conclusion can be drawn in respect of production and clearance of goods. Any conclusion drawn on the basis of inferences involving unwarranted assumptions are vitiated by an error of law. Further, in the case of molasses, the State excise authorities have a physical control and special supervising staff are posted in the factory and distillery unit to safeguard the case of State excise revenue on molasses and allied products. The State excise authorities, in this case, have not made....