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TMI Blog2017 (6) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... sit) not received in the factory, not finally utilized for the manufacturing of final products, which are stated to be transit or handling loss. 2. The appellant company has got separate units namely sugar division, chemical division, paper and paper board division in the same premises. The appellants availed Cenvat facility in respect of duty paid on inputs and capital goods used in the manufacture of the final products. During the period May, 2000 to June, 2001, they availed Cenvat credit on Molasses received from the sugar division by the chemical division. It appeared to Revenue that the sugar unit retained duty paid Molasses for which no permission from proper officer under Rule 51A of Central Excise Rules, 1944 was obtained. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observing that the appellant have taken Cenvat credit on the strength of Non-statutory Challans/Bills which are not the prescribed documents and/or proper documents for taking Cenvat credit and secondly credit of duty is permissible only on that quantity of inputs which are used in or in relation to manufacture of the final products. In the instant case, as the loss is prior (or in transit) to receipt in the factory/chemical division. The quantity short receipt, is not used in or in relation to manufacture of the final products. Thus, denying the Cenvat credit on Molasses. 4. The Id. Counsel for the appellants urges that so far taking of credit on the basis of Non-statutory Challans/Bills is concerned, this issue is settled by this Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in transit. In the case of normal loss the cost of lost units or quantity is spread over the balance quantity of inputs and/or raw materials, requiring no accounting treatment. It is further pointed out that the loss in the present case is 0.4% approximately. It is further pointed out that up to the extent of 2% in Molasses transit loss or storage loss is permitted, under Rule 8(4) of the U.P. Sheera Niyantran Niyamavali, 1974 read with CBEC Circular No. 261/ K/82 dated 06/02/1982 read with Circular No. 261/136/97- C & E dated 15/01/1998. It is further urged that the quantum of normal loss amounts to usage in the production of final products. It is further pointed out that the Molasses remain in the physical control of the State Excise Insp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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