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TMI Blog2014 (12) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... s loss in the appellant’s case is very low and, therefore, the explanation of processing loss of the material during the manufacturing process is reasonable and has to be accepted. Therefore, we do not find any merit in the contention of the Revenue that ₹ 9.12 lakhs is recoverable from the appellant. Accordingly, we set aside the same. In addition, an amount of ₹ 78,420/- has been confirmed in respect of the shortage of 1269 kgs which occurred at the job-worker’s end out of 14,400 kgs of raw materials and this loss is also reasonable and, therefore, there is no reason for confirmation of duty demand on this count also. As regards the demand of ₹ 1,70,990/-, in the statement recorded under Section 14 of the Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Oriental Aromatics Ltd. He has set aside the penalties imposed on the appellant. Aggrieved of the same, the appellant is before us. 2. The learned Counsel for the appellant submits that the appellants are manufacturer of perfumery product and they used chemicals, essential oils and resinoids in the manufacture of perfumery compounds. In the process of manufacture of the said products, wastage occurs both by way of handling loss as also by way of process loss. It is on this loss the impugned demands have been confirmed. For the year 1992-93 the total consumption of raw material was 204,834 kg and the quantity of goods manufactured was 204,380 kg. The difference between the consumption and production was 454 kg. As compared with the produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 421,271 kg of raw materials, the quantity manufactured was 419,891 kgs. The difference between the consumption and production was only 1380 kg, which comes to about 0.32%. The learned Counsel submits that the wastage recorded by them is far less compared to the standard input of norms (SION) prescribed by the Government for perfumery products. For example, in the case of Eucalyptol, the standard input of norms stipulates the norm of 1.68 kg of raw materials to 1 kg of finished product. Similarly, in the case of Methyl Eugenol, the raw material requirement is 1.40 kg for 1 kg of finished product. When compared to this, the process loss incurred by the appellant is far less being less than 1% in the most of the cases. In these circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order. 4. We have carefully considered the submissions made by both sides. 4.1 As regards the demand of ₹ 9.12 lakhs (approx.) being the Modvat credit involved on the raw materials found short and not used, we find that difference between the quantity of raw materials consumed and finished products manufactured is very negligible and below 0.5 % in all the cases. We also note that as per the standard input of norms, the percentage of wastage for perfumery products is much higher up to 50%. Compared to this, the process loss in the appellant s case is very low and, therefore, the explanation of processing loss of the material during the manufacturing process is reasonable and has to be accepted. Therefore, we do not find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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