Condonable molasses shortage within the recognised loss margin prevents denial of duty abatement.

Shortage of molasses stored in steel tanks, where the recorded loss was below two per cent of the stock balance, was treated as condonable under the binding administrative clarification covering losses in pucca pits and steel tanks. On those facts, the claimed evaporation-related shortage fell within the recognised margin, and the objection based on delayed intimation did not override that clarification. The resulting effect was that abatement of duty could not be refused merely because the shortage was within the condonable limit; denial of abatement was therefore unsustainable on the stated facts.

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Issues: Whether shortage of molasses stored in steel tanks, being less than two per cent of the recorded balance, was condonable so as to justify grant of abatement of duty.

Analysis: The shortage found on verification was admitted to be less than two per cent of the recorded balance in the statutory records. The Board's clarification dated 18-7-83 treated up to two per cent loss in respect of molasses stored in puccka pits and steel tanks as condonable. On the facts found, the claim of evaporation-related loss fell within that condonable margin and the departmental objection based on delayed intimation did not displace the effect of the Board's clarification.

Conclusion: The shortage was condonable and the denial of abatement was unsustainable.

Ratio Decidendi: Where the recorded shortage of molasses in storage is within the condonable limit recognised by the binding administrative clarification, abatement cannot be denied on that ground.

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