Transit loss adjustment permits gains in one excisable consignment to offset losses in another where common loading creates inherent mixing.

Where different excisable products are loaded and discharged through a common tanker system without any intervening separation, gains in one consignment may be adjusted against losses in another for computing overall transit loss. Such netting is appropriate only where the mixing or migration is inherent in the process, the facts are verified by the Assistant Collector, and there is no allegation of mala fides or wanton negligence. The adjustment was confined to the overall loss already allowed, subject to that verification.

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Issues: Whether gains arising in one product during transit could be set off against losses in another product loaded and discharged through the same tanker and common system for the purpose of computing overall transit loss and condonation.

Analysis: Where different excisable products are loaded one after another through a common loading and discharge mechanism and there is no intervening arrangement separating the goods, gains in one consignment may be adjusted against losses in another if the mixing or migration of products is inherent in the process. Such adjustment is appropriate only where the phenomenon is verified by the Assistant Collector and there is no allegation of mala fides or wanton negligence.

Conclusion: The gains were directed to be set off against the losses, and condonation was confined to the overall loss already allowed by the lower authorities, subject to verification by the Assistant Collector.

Ratio Decidendi: In cases of transit loss involving common loading and discharge of excisable goods, gains and losses may be computed on an overall basis and one consignment's gain may be adjusted against another's loss where the mixing is inherent in the process and the facts are duly verified.

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