Bonded export clearances must be separately accounted for; shortage in one consignment cannot offset excess in another, and duty follows non-export.

Excisable goods cleared under bond for export must be exported in accordance with the relevant AR-4, and each bonded clearance must be separately accounted for; shortage in one consignment cannot be adjusted against excess in another unless the statute or rules expressly permit it. The power to condone loss under Rule 49 of the Central Excise Rules, 1944 was confined to loss within the factory premises, so transit or storage loss outside that scope could not be ignored. Duty was therefore payable on the quantity cleared for export but not actually exported. The Tribunal also held that the Revenue appeal was maintainable, because the dispute concerned non-exported goods and not rebate on goods exported outside India.

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Issues: (i) whether the Tribunal had jurisdiction to entertain the Revenue appeal in view of proviso (c) to Section 35B(1) of the Central Excise Act, 1944 and the remedy under Section 35EE of the Central Excise Act, 1944; and (ii) whether shortage or loss of molasses cleared under bond for export could be condoned or adjusted against excess quantities in other consignments, so as to avoid duty on the quantity not exported.

Issue (i): Whether the Tribunal had jurisdiction to entertain the Revenue appeal in view of proviso (c) to Section 35B(1) of the Central Excise Act, 1944 and the remedy under Section 35EE of the Central Excise Act, 1944.

Analysis: The dispute related to duty demanded on molasses which were cleared for export but not exported, and not to rebate or goods actually exported outside India. Proviso (c) to Section 35B(1) applies where the subject matter concerns goods exported, while the present controversy concerned non-exported goods liable to duty. The cited authority on rebate of exported goods was therefore inapplicable.

Conclusion: The appeal was maintainable before the Tribunal and the objection to jurisdiction was rejected.

Issue (ii): Whether shortage or loss of molasses cleared under bond for export could be condoned or adjusted against excess quantities in other consignments, so as to avoid duty on the quantity not exported.

Analysis: Goods cleared without payment of duty under bond had to be exported as covered by the relevant AR-4. There was no legal provision permitting transit or storage loss to be allowed in respect of such clearances, and the power to condone loss under Rule 49 of the Central Excise Rules, 1944 was confined to loss within the factory premises. Shortage in one consignment could not be set off against surplus in other consignments, because each AR-4 clearance had to be accounted for separately. The loss-condonation precedent relied upon was distinguishable on facts and law.

Conclusion: Duty was payable on the quantity cleared under one AR-4 but not exported, and the condonation or adjustment of the shortage was disallowed.

Final Conclusion: The appellate order was modified and the Revenue's challenge succeeded to the extent of the duty demand on the molasses not exported.

Ratio Decidendi: Where excisable goods are cleared under bond for export, each bonded clearance must be separately accounted for, and no shortage or transit loss can be adjusted against excess in other consignments unless the statute or rules expressly permit such condonation.

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