Judgment:
1. This is an appeal against Order No. 23/Addl. Collr/MP/90, dated 5-2-1991 passed by Additional Collector of Central Excise, Kanpur.
2. The facts in brief are that M/s. Bajaj Hindustan Ltd. was visited by Central Excise Officers on 17-10-1989. They found on verification of stock of molasses that actual stock of molasses was 2,04,962.00 qtls.
as against recorded balance of 1,86,367.65 qtls. This quantity was ascertained on the basis of dip-reading measurement. In pursuance of this a show cause notice was issued demanding duty from the appellants and proposing confiscation of 18,594.35 qtls. of molasses valued at Rs. 1,78,706.00 and imposition of penalty.
3. In his order dated 5-2-1991, the Additional Collector rejected the plea of the appellants that there was no excess and the volume of molasses varies with respect to foam formation which depends upon the ambient temperature and chemical decomposition of molasses and that dip method or volumetric method of ascertaining the weight of molasses is not reliable.
4. The learned counsel of the appellants submitted before us that volume of molasses varies with the formation of foam in hot weather.
The changes depend upon the temperature and decomposition of molasses.
The dip method or volumetric method for ascertaining the weight of molasses cannot always be a reliable method. He submitted that daily production is recorded after actual weighment. Weight therefore, cannot vary though the volume may change due to foaming. There can always be variation in the dip reading because of foaming and quantity of molasses ascertained by dip reading cannot be exact because of this.
The learned counsel drew our attention to ISI specifications for steel tanks for storage of molasses IS. 5521-80. This indicates that 10% is always provided for foam in working out volume of tanks for storage of molasses.
5. The learned SDR submitted that the molasses belong to the sugar season 1988-89 whereas verification was done on 17-10-1989 and the foam could have settled by that time. He, however, conceded that foaming can also result because of storage alone.
6. Heard both sides. ISI specifications clearly indicate that 10% allowance is always given for foaming during storage of molasses. It is also admitted by SDR that excess noticed is within 10%. Since the fact of foaming has not been disputed and it is also a fact that during foaming dip reading measurement could not indicate exact weight. We find considerable force in the contentions of the appellants. We, therefore, set aside the impugned order and allow the appeal.