ORDER
P.K. Desai, Member (J)
1. This appeal is directed against the Order-in-Appeal No. A/06/92 dated 13-1-1992 of the Collector of Central Excise & Customs, (Appeals) Pune.
2. The Appellants sought permission from the Competent Authority for remission of duty vide Rule 49 of the Central Excise Rules for 1310.440 M.T. of Molasses involving Central Excise duty of Rs. 41,279/- on the ground that the same had became unfit for consumption. The same was granted by the Collector vide his Order dated 25-5-1984. The Appellants, however, during the period from 18-6-1984 to 3-8-1984 removed the said quantity by sale of the same to one Mr. Wadekar for Rs. 1,00,000/- and hence show cause notice dated 13-12-1984 was issued demanding duty of Rs. 41,270.86. The said demand had been contested and it was contended that the removal was not as Molasses but as the Waste for being used as Fertilizer and hence no duty was chargeable. The Adjudicating Authority dropped the demand, however, on review application filed, the Collector (Appeals) confirmed the demand.
3. Mr. K. P. Joshi, the ld. Advocate has pleaded that the Molasses had been adjudged as unfit for consumption and duty remission was already given and that what was removed was merely the waste and it that case, duty cannot be demanded on Molasses. To substantiate the same he has referred to the Tribunal decision in Shankar Sugar Mills v. Collector -1994 (71) E.L.T. 753 (Tribunal). He has also pleaded that once remission of duty is granted, there is a bar of Res judicata and the issue cannot be re-opened. For this the ld. Advocate refers to the decision in N. V.K. Mohamed Sultan v. Collector -1991 (55) E.L.T. 401 (Tribunal).
4. Mr. Gurdeep Singh, the ld. DR however, submits that here, after obtaining the order for remission, the Appellants have removed the goods and hence bar of Res judicata would not apply. He also refers to the decision of the Tribunal in Collector v. Dhampur Sugar Mills – 1986 (24) E.L.T. 28A (Tribunal) which is based on the Supreme Court decision in Khandelwal Metal and Engineering Works v. Union of India -1985 (20) E.L.T. 222 (SC) and has pleaded that the goods removed become chargeable to duty. He also submits that the goods have been removed for being used as Fertilizer.
5. Considering the submissions made and going through the records, it is clear that the appellants have initially sought remission from duty vide Rule 49 of the Central Excise Rules on the ground that Molasses had become unfit for consumption and accepting their said plea, remission was granted. It was subsequent thereto, that the appellants removed the goods. Happening of some subsequent event was not existent at the time of passing of the order and as such, it is not open to the party to plead Res judicata. The said principle could not apply here. Reliance on the Tribunal decision in Re: NKV Mohammed Sultan (supra) appears to be misplaced here as the facts there were entirely different. Here the event giving cause of action has arisen subsequently. Moreover, the order obtained earlier was based on the facts that the Molasses were unfit for consumption, whereas subsequently the said representation appeared to be not a correct one. The said submission, therefore cannot be accepted.
5A. Rule 49 of the Rules provides for remission of duty if the goods become unfit for consumption. The word ‘consumption’ has nowhere been defined and going by the ordinary Dictionary meaning the goods should be in such a condition that the same has no use whatsoever. The submission of the ld. Advocate that if the Molasses changes their character, they ceased to be Molasses and the Certificates from Western Maharashtra Development Corporation dated 25-7-1983 read with the Order passed by the Competent Authority granting remission, establishes beyond doubt that the Molasses have become unsuitable and hence fall within second proviso to Rule 49 of the Rules, cannot be accepted when the evidences and the admission from the Appellants indicates that the purchaser Mr. Wadekar has bought them as Fertilizer. The Molasses must have retained some of their properties which, if not enough for being used for distillation, could be used for some other purpose. When such properties exist, the Molasses cannot be branded as having become “unfit for consumption” so as to attract the second proviso to Rule 49.
6. The decision in Re: Shankar Sugar Mills (supra) referred to by the ld. Advocate related to the facts where Molasses had lost their all the properties and what was removed was only lump and a solid residue. Here however, the removal is as Fertilizer and at the best it could be taken as having become a sub-standard Molasses which could not be used in Distillery. The Supreme Court have in Re : Khandelwal Metal and Engineering Works (supra) and the Tribunal have in Re: M/s. Dhampur Sugar Mills (also supra) have held that such sub-standard goods still remain liable to duty.
7. Considering from this angle, therefore, the duty demand raised appears to be in confirmity with the law and there is no reason to interfere with the same.
8. The appeal is under the circumstances rejected.