2010 (2) TMI 1040 - AT - Central Excise

Summary

Issues:
1. Reasonableness of shortage in consignments of normal paraffin imported under Notification No. 68/98-Cus.
2. Applicability of permissible limit on losses in volatile products.
3. Comparison with Tribunal's Final Order in the case of SPIC Ltd. v. CCE, Madurai.

Analysis:

1. The judgment dealt with the reasonableness of shortages in consignments of normal paraffin imported under Notification No. 68/98-Cus. The Commissioner of Central Excise (Appeals) had held that the shortages of 0.76%, 0.62%, 0.71%, and 1.09% in the imported paraffin were within the permissible limit considering the volatile nature of the product. Consequently, the demand raised on the shortages was set aside by the Commissioner, which was confirmed by the adjudicating authority.

2. The Tribunal referred to its Final Order in the case of SPIC Ltd. v. CCE, Madurai, where it was established that differences in quantity due to various factors like unloading, transit, and weighment method could be ignored if the entire imported quantity was utilized without diversion. The Tribunal in that case set aside the demands against SPIC Ltd., emphasizing the nature of the product and permissible limits of losses as per Board's Circular No. 55/96-CX.8. Applying the same reasoning, the Tribunal in the present case upheld the impugned order due to the volatile nature of the product and the reference to permissible limits in the circular.

3. The judgment followed the ratio of the Tribunal's decision in the SPIC Ltd. case, thereby affirming the impugned order and rejecting the appeal. The decision was based on the understanding that losses within permissible limits in volatile products, as per relevant circulars and precedents, should not attract demands or penalties. The judgment was pronounced after considering the arguments from both sides and in line with established legal principles and precedents.