TaxTMI 
TaxTMI 
2016 (4) TMI 1192
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....physical control of the State Excise dept., of U.P. and the State Excise Inspector is posted at the factory. The daily stock record of molasses is maintained in form MF-5 register, as prescribed under the State rules. As molasses are volatile in nature subject to spontaneous decomposition of non-complex non-sugars under formation of CO2, which is an exothermic reaction (a chemical reaction that releases energy by light or heat). On 5-6-2007, the appellants at about 5.00 A.M. noticed foam and molasses coming out of Tank No. 1. On the same day they informed Range Supd., By fax and Revenue officials visited the factory. Appellant also took all plausible steps to mitigate the loss by sprinkling water, etc. Assistance of fire-brigade was also ta....
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....The matter has been further examined in the Board and it is felt that the classification of charred molasses appears to be under heading 17.03 as molasses or 23.01 as other waste of sugar manufacture or 38.23 as residual product of chemical and other industries, depending on the extent of damage or burning during auto-combustion, as opined by the Deputy Chief Chemist. The exact classification can be ascertained by drawing samples and from chemical analysis. If charred molasses is not marketable, it can further be destroyed and duty remitted under rule 49." 4. It was further observed that the test reports certify that left molasses were not of desired standard, however the properties retained in such burnt molasses were enough to class....
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.... that cinder (coal ash) is non-taxable item. Further burnt molasses, no longer remained molasses, and had been removed as cinder, which is not disputed. Further loss of volume and weight on burning is natural, and the learned Commissioner have erred in disbelieving the burning loss. The learned Counsel relies on the following rulings :- (i) Shanker Suger Mills v. CCE - 1994 (71) E.L.T. 753 (Tri.-Del.). (ii) RBNS Sugar Mills Ltd. v. CCE - 1996 (87) E.L.T. 687 (Tri.-Del.) (iii) Hindustan Insecticides Ltd. v. CCE, Cochin reported in 1988 (33) E.L.T. (Tribunal) 6. The ld. DR relies on the impugned order. He further relies on the following rulings :- (i)  ....