2001 (10) TMI 946 - AT - Central Excise

Summary

Issues:
1. Failure to furnish proof of export leading to duty demand.
2. Allegation of handling loss on Ferro Alloys.
3. Application of Ministry's letter condoning handling losses.
4. Extending condonation to other units for uniformity.

Issue 1: Failure to furnish proof of export leading to duty demand

The case involved the removal of 6714.8 MT of Ferro Alloys for export under bond, with an allegation of failure to provide proof of export for 45.892 MT, resulting in a duty demand of Rs. 1,21,275. The Assistant Commissioner confirmed the demand against the respondents. On appeal, the Commissioner (Appeals) set aside the Assistant Commissioner's order, prompting the Revenue to file the present appeal.

Issue 2: Allegation of handling loss on Ferro Alloys

During the appeal, the respondents attributed the shortages to handling loss due to the brittle nature of Ferro Alloys. They argued that the Ministry had allowed a handling loss of one percent for Ferro Alloys, while their case only showed a loss of 0.68%. They contended that there was no negligence on their part and no evidence of diversion for home consumption. The Commissioner (Appeals) accepted these contentions and overturned the Assistant Commissioner's order.

Issue 3: Application of Ministry's letter condoning handling losses

The Commissioner (Appeals) based the decision on a letter from the Ministry dated February 12, 1987, which condoned losses up to one percent for Charge Chrome clearances. The Revenue argued that this condonation applied only to a specific manufacturer and could not be extended to the respondents. However, the Tribunal found merit in the argument that such directions by the Board should be uniformly followed, as seen in a previous case. As the losses in the present case were below 1%, the Tribunal upheld the Commissioner's decision to apply the norms set in the Ministry's letter.

Issue 4: Extending condonation to other units for uniformity

The main contention in the appeal was whether the Ministry's letter condoning losses up to one percent should be restricted to a specific manufacturer or extended to other units for uniformity. The Tribunal agreed with the Commissioner (Appeals) that the same product was involved in both cases, and therefore, there was no justification to limit the scope of the letter only to one manufacturer. The Tribunal rejected the Revenue's appeal and disposed of the stay petition accordingly.