2007 (8) TMI 304 - AT - Central Excise

Transit loss - Cement Industry If transit loss in respect of clinker is permitted by dept. in respect of other cement industries, the appellant should not be denied of such benefit - Impugned Miscellaneous Application for entertaining additional ground that demands shall not sustain on the point of limitation also since point of limitation goes to root of matter and being a question of law, it can be agitated at any stage of pendency of appeal, so application is allowed matter remanded

Summary

Issues:
1. Discrepancy in raw material leading to show cause notice.
2. Granting Modvat credit for goods lost in transit.
3. Reconsideration of transit loss in Cement Industry.
4. Entertaining additional ground on the point of limitation.

Analysis:
1. The appellant argued that there was no discrepancy in the raw material alleged by Revenue, as the balance sheet disclosed the normal transit loss, which is inevitable for the nature of goods dealt by the appellant. The appellant had informed the Authorities about the transit loss in 1994, which was natural and reasonable for Cement Industries. The Tribunal noted that the loss by natural process is common in this industry and should be considered by the Excise Authorities.

2. The Revenue contended that granting Modvat credit for goods lost in transit without undergoing manufacturing process would harm its interests. The Tribunal observed that Modvat credit should be set off against excise duty liability only for inputs that physically undergo the manufacturing process.

3. The Tribunal considered the appellant's submission fair for reconsideration of the issues in the Cement Industry. It emphasized that if transit loss is permitted for other cement industries, the appellant should not be denied the same benefit. The Tribunal suggested a reexamination of the matter in light of relevant considerations and legal principles to avoid recurring litigations.

4. The Tribunal allowed the appeal by remanding the case to the Adjudicating Authority for a fresh decision. Additionally, the Tribunal permitted the appellant to raise the point of limitation at any stage of the appeal, emphasizing its importance as a question of law. The Miscellaneous Application filed by the Appellant was also allowed on the point of limitation for further consideration by the Adjudicating Authority.