ARIGNAR ANNA SUGAR MILLS Vs. CEGAT, CHENNAI

JUDGEMENT

(1.) The petitioner is a Cooperative Sugar Mill. It is manufacturing molasses as a bye-product, which is an excisable commodity. Since the storage capacity of the Tanks maintained by the petitioner was less, they sought permission of the Excise Department to store molasses in kutcha earthem pits, after filling up the Steel Tanks without payment of duty. The Excise Department permitted them to do so upon payment of duty. The petitioner accordingly paid the duty even at the time of storage but before the molasses went out of the factory.

(2.) Subsequently, the petitioner suffered two problems viz. (i) the sale value of the stored molasses got reduced and (ii) a portion of the stored molasses also became unfit for consumption or sale. Therefore on these two grounds, the petitioner claimed refund of the excise duty paid on such molasses. The claim was rejected first by the Assistant Commissioner, by an Order-in-Original dated 24-6-1997 and later by the Commissioner, by an Order-in-Appeal dated 28-9-2001 and subsequently by the Tribunal by an order dated 24-9-2002 12002 (150) E.L.T. 1103 (Tribunal)]. It is against these orders that the petitioner has come up with the present writ petitions.

(3.) There is no dispute about the fact that the petitioner paid excise duty in advance, when the petitioner sought permission to store the molasses in kutcha earthern pits. There is also no dispute about the fact that the sale value of a part of the molasses got reduced at the time when they moved out of the factory. In other words, excise duty was paid by taking the market value as on the date of storage. But by the time they were actually sold, the market price fell. Further there is no dispute about the fact that a portion of the molasses became unfit for consumption or sale. Therefore the entitlement of the petitioner on factual basis, to refund of excise duty is virtually not in dispute.