Packing loss on hygroscopic goods was allowed as a normal handling loss, and the disallowance was set aside.

Packing loss arising during transfer, quality control checks and packing of a hygroscopic product was treated as a normal incident of handling and not a disallowable loss merely because separate permission under Rule 56B of the Central Excise Rules, 1944 was absent. The record showed that the competent authority had permitted transit loss up to 1%, and the Tribunal had already taken the same view in the assessee's earlier matter. On that basis, the disallowance of the claimed packing loss was held unjustified and was set aside in favour of the assessee.

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Issues: Whether packing loss was disallowable for want of permission under Rule 56B of the Central Excise Rules, 1944.

Analysis: The loss was found to be a normal incident of handling a hygroscopic product during transfer, quality control checks and packing. The record also showed that the competent authority had permitted transit loss to the extent of 1%, and the Tribunal had already taken the same view in the assessee's own earlier matter. In these circumstances, the disallowance of the claimed loss was held to be unjustified.

Conclusion: The packing loss was held to be allowable and the disallowance was set aside in favour of the assessee.

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