SARAYA DISTILLARY Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) SHRI S. P. Ojha, ld. Consultant pleaded that the appellants are receiving molasses falling under sub -heading No. 1703.10 of the Schedule to the CETA from different factories. Controlled molasses is used exclusively for manufacture of country liquor and de -controlled molasses is used for the manufacture of Indian made foreign liquor and ethyl alcohol. A part of ethyl alcohol is converted into de -natured ethyl alcohol. The Excise Department of State Government has full control over the use of controlled molasses in manufacture of country liquor and utilisation of the de -controlled molasses for manufacture of Indian made foreign liquor and ethyl alcohol and subsequent use of ethyl alcohol.

(2.) THE appellants receive de -controlled molasses on invoices and on receipt in the factory it is weighed and entered in RG -23A Part I register. Only this molasses is used for manufacture of ethyl alcohol and de -natured ethyl alcohol. The State Excise Inspector posted at the factory gives certificate to them regarding the use of molasses in manufacture of ethyl alcohol and use of ethyl alcohol in manufacture of de -natured ethyl alcohol based on records maintain in form PD -8 Part I and II, PD -9 and PD -13 prescribed by State Government. He has also given a certificate of recovery of ethyl alcohol per quintal of molasses (given at page 91 -92 of paper book). He, therefore, stated that on the basis of the above said details, the quantity of the ethyl alcohol, which has gone for the manufacture of de -natured ethyl alcohol and the quantity of the molasses utilized for the manufacture of de -natured spirit was worked out. On this quantity of molasses, Modvat credit was taken in RG -23 A, Part -II but the department has not accepted this and denied them the credit.

(3.) SHRI P. M. Rao., ld. JDR appearing for the Revenue pleaded that there is no dispute that the appellants are entitled for Modvat credit on the duty paid on molasses but they have to establish the correct quantity which has gone into the manufacture of de -natured ethyl alcohol. The appellants have not been able to establish the exact quantity of the de -controlled molasses which has gone into the manufacture of de -natured ethyl alcohol, therefore, no credit was given to them. He has no objection in allowing the credit on the quantity of the decontrolled molasses used for the manufacture of de -natured ethyl alcohol if the appellants are able to establish the same.