1982 (9) TMI 60

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.... Mills Company Limited manufacture sugar in Mawana Sugar Works, Mawana and Daurala Sugar Works, Daurala in the district of Meerut. The Daurala Sugar Works also has a distillery for manufacturing alcohol from molasses. Molasses produced at the Mawana and Daurala Sugar factories is transferred to the distillery situate in the premises of the Daurala Sugar Works. In the petition filed by M/s Amritsar Sugar Mills it is not asserted that the petitioner manufactures alcohol also. In the process of manufacture of sugar molasses is produced as a bye-product which forms the basic material from which alcohol is manufactured. The molasses produced by the sugar mills is consumed in their distilleries. The State of Uttar Pradesh has passed an Act known ....

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....dule to the Central Excises and Salt Act. The petitioners objected to this demand but without any success. They have prayed for quashing the demands raised by the respondents. The Delhi Cloth and General Mills Company Limited, which has paid the duty demand by the respondents, has prayed for refund of the excise duty paid by it. Certain other prayers have been made in these petitions but since no argument was addressed in support thereof, they need not be set out here. 4. It was urged that since excise duty is essentially a tax on production and manufacture of excisable goods, no duty could be levied in respect of goods manufactured and produced during the period when excise duty was not leviable. According to the petitioners molasses pr....

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....cisable goods shall be the rate and valuation in force (i) in the case of goods cleared from the premises of a curer on payment of duty on the date on which the duty assessed ; and (ii) in the case of goods cleared from a factory or a warehouse, subject to certain other rules, which are not relevant for our purpose, on the date of the actual removal of such goods from such factory or warehouse. Rule 49 also makes it clear that excise duty is chargeable on removal of the goods from the factory premises or from an approved place of storage. It clearly provides that payment of duty shall not be required in respect of excisable goods made in a factory until they are about to be issued out of the place or premises specified under rule 9 or are a....