1998 (11) TMI 608 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 57-F regarding duty demand on short receipt of products.
2. Application of Board's circular on invisible loss and burning loss.
3. Assessment of burning loss possibility in high purity inputs.

Analysis:

Issue 1: The dispute centered around the duty demand on short receipt of products sent for processing under Rule 57-F. The Asstt. Collector assumed a 1% loss and confirmed the demand, which the Collector (Appeals) deemed arbitrary. The Collector referred to Rule 57-F(3) and (4)(c) regarding waste management during processing, upholding the Asstt. Collector's decision due to the absence of waste brought back. The appellant, citing Board's circular, argued against duty on invisible loss, emphasizing the tribunal's precedent in a similar case.

Issue 2: The appellant relied on the Board's circular to support their claim that duty should not be imposed on invisible loss, as clarified in the circular. The appellant contended that the Collector erred in disregarding the circular, asserting its binding nature on departmental officers. The Tribunal's judgment in Ranadey Micronutrients was cited to establish the binding nature of Board instructions, particularly regarding invisible loss due to burning.

Issue 3: The J.D.R. argued against the possibility of burning loss in high purity inputs, challenging the appellant's plea. The Judge noted the absence of discussion on this issue in lower orders and the Commissioner's report confirming a loss at some stage. Without clarity on the processing stages of the inputs, a definitive ruling on the burning loss possibility in high purity inputs was deemed premature.

In the final decision, the Judge considered the facts and Board's instructions, setting aside the impugned order and allowing the appeal with consequential relief. The judgment highlighted the importance of adhering to Board instructions on invisible loss and emphasized the need for a thorough assessment of burning loss claims, especially in cases involving high purity inputs.