TaxTMI 
TaxTMI 
2007 (2) TMI 36
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....the adjudicating order). 2. The case of the Revenue was that the appellant-company which was engaged in manufacture of VP sugar and molasses was having excess stock of molasses when the records were checked on 10-5-1999 by the Central Excise Officers. The quantity of molasses physically verified was 639994.03 qtls. as against the book balance of 59,599.10 qtls., and thus there was an excess stock of 4,394.94 qtls. of molasses valued at Rs. 3,69,174.12, involving Central Excise duty of Rs. 2,19,746.50. A show cause notice was, therefore, issued proposing confiscation of the excess stock, recovery of duty and imposition of penalty. 3. The case of the assessee was that the allegation of excess quantity of 4,29493 qtls. of molasses which was ....
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....n payment of redemption fine of Rs. 40,000/-. On such redemption, the party was made liable to pay appropriate Central Excise duty on the clearance of the confiscated goods. A penalty of Rs. 4,000/- was also imported under Rule 173Q of the Rules of 1944. 5. Before the Appellate Commissioner, the adjudicating order was challenged only on the ground that dip reading method was not a foolproof method. According to the assessee, the excess quantity of molasses was well within the prescribed limit of 10% and that the matter was covered by the ratio of the decision in Bajaj Hindustan Ltd. CCE, Kanpur reported in 1994 (72) E.L.T. 710 (T), in which it was held that due to presence of foam dip reading measurement could not indicate correct weight o....
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....mtrs. with a foam layer of 0.98 mtrs. For working out the excess, the measurement of foam layer was not taken into account and by giving allowance thereof only the nett dip of the two Tanks, namely, 04.81 mtr. for Tank No. 1 and 06.52 mtrs. for Tank No.2 were taken into account and the excess quantity of mo lasses was found to be 4,394.93 qtls. The quantity of foam in steel Tank was ascertained by observing the bubbles on the dip rod. It is obvious that the foam layer of molasses stored in a steel Tank would have left bubbles on the dip rod indicating foam on its graduated scale. 7.2 The main thrust of the argument of the assessee is that dip reading was not the correct method for ascertaining the quantity of molasses, as the actual weight....
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....ed as follows. The required volume of different factories with varying cane crushing capacities may be calculated accordingly (a) Average molasses production, per cent cane 4.0 (b) Average duration of season in days 140 (c) Total molasses production in tones for the season  ....
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....ulations of volumes of tanks for storing molasses, that while calculating the volume, 10% volume of molasses m3 is required to be added for foam formation. The volume so prescribed for foam has to be big enough to allow expansion due to foaming within the tank to the extent of 10%. This ISI specification is an authentic indication of the upper limit of allowance for foaming that takes place in the molasses stored in a steel tank by the industry. If this extra calculation of volume is not added then on foam being formed, it would spill out. The layer of foam in a steel tank would, in view of these specifications, normally expand only up to 10% of the volume of molasses stored therein. The ISI specification 5521-1980 in clause 3, "Volumes and....
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....iquid in the tank. Dip stick are suitably graduated to indicate the volume of liquid at different heights in the tank. The unit of volume is cubic decimetre or litre, or cubic centimeter or mililitre, as per the requirement. The device is generally used for measuring the quantity of milk at milk purchasing centers, as noted in Part VI of the 8th Schedule to the Standards of Weights and Measures (General) Rules, 1987. Such dip stick is also used as a method of computation of the bulk storage of petroleum and liquid petroleum products in vertical storage tanks and calculations are made on the accepted mathematical principles as indicated in Part III of Schedule 9-A of the said Rules of 1987. 7.7 The dip rod will show the measurement in verti....