2015 (10) TMI 1785 - AT - Central Excise

Duty demand - Shortage of goods - Held that - It is a fact on record the goods have been weighed through two different methods of weighment (a) through weighbridge at the time of despatch from the factory & (b) at the time of exportation through mother vessel through draft survey. It is accepted principle that if weighment is done on two different weighbridge, difference may occur. In these circumstances, 1% variation in weighment is acceptable as claimed by the appellant as compared to shortage found in 1.9% and 4.09% respectively in the consignments exported. Therefore, I find that the claim of the appellant is acceptable for benefit of 1% shortage of weight in the finished goods. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
- Duty demanded for short supply in export consignment
- Claim of 1% shortage by the appellant
- Reliance on previous case law by the appellant
- Acceptance of 1% variation in weight

Analysis:
The appellant appealed against an order demanding duty for short supply in export consignments of iron ore fines. The appellant exported two consignments, and discrepancies in weight were found during weighment at the factory and through draft survey on the mother vessel. The appellant argued that variations in weighment methods could lead to discrepancies and claimed a 1% shortage as permissible based on a previous Tribunal decision. However, both lower authorities denied the claim and imposed duty, interest, and a penalty. The appellant contended that a 1% tolerance in weight should be granted due to differences in weighment methods.

The appellant's counsel argued that variations in weighment methods could result in discrepancies and requested a 1% tolerance in weight. On the other hand, the respondent's representative opposed the appellant's reliance on a previous case law, citing a decision by the High Court that rejected a similar claim by another party. The Tribunal noted that weighment was conducted using two different methods, leading to variations in weight. Considering this, the Tribunal found the appellant's claim of a 1% shortage acceptable compared to the actual shortages of 1.9% and 4.09% in the consignments exported.

The Tribunal concluded that a 1% variation in weighment was acceptable due to the differences in weighment methods employed by the appellant. As a result, the impugned order demanding duty, interest, and penalty was set aside, and the appeal was allowed with any consequential relief. The decision highlighted the importance of considering variations in weighment methods when assessing shortages in export consignments and upheld the appellant's claim of a 1% shortage in the finished goods based on the acceptable tolerance limit.