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TMI Blog2010 (12) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... e credit taken amounting to Rs. 65,320/- on short received quantity of 1317.00 qtl. of molasses under Rule 57G and ordered recovery of the same under Rule 57I read with Section 11A of Central Excise Act, 1944 - it is not a case that some part of the quantity which was invoiced by the sugar division has been diverted and not sent to the chemical division because sender and receiver unit are the same legal entity - he larger bench of the Tribunal in the case of Bhuwalka Steel Industries Ltd considered the transit loss involved in transfer from one legal entity to another legal entity and prescribed guidelines for condoning the losses - It was held that the order of the lower authorities cannot be allowed to survive and the same are set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd denied the credit taken amounting to Rs.65,320/- on short received quantity of 1317.00 qtl. of molasses under Rule 57G and ordered recovery of the same under Rule 57I read with Section 11A of Central Excise Act, 1944. The Commissioner (Appeals) has upheld the order of the original authority. 5. Learned Advocate for the appellant submits that the credit cannot be disallowed on the ground that there was a small variation due to storage loss, drayage and handling/transit loss. He relies on the decision of the Larger Bench of the Tribunal in the case of CCE, Chennai vs. Bhuwalka Steel Industries Ltd. reported in 2010 (249) ELT 218 wherein it has been held that minor losses during transit has to be ignored and credit should be allowed after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the case laws cited by both sides which have been extracted above, we are of the considered view that different types of shortages cannot be dealt with according to any one inflexible and fixed standard for the purpose of allowing credit under Rule 3(1) of the Cenvat Credit Rules. Decision to allow or not to allow credit under rule 3(1), in any particular case, will depend on various factors such as the following:- (i) Whether the inputs/capital goods have been diverted en-route or the entire quantity with the packing intact has been received and put to the intended use at the recipient factory. (ii) Whether the impugned goods are hygroscopic in nature or are amenable to transit loss by way of evaporation etc. (iii) Whether the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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