Permissible loss in imported volatile goods upheld where shortage arose from transit and handling losses, not diversion.

Shortage in imported normal paraffin was treated as permissible loss because the goods were volatile, the discrepancy arose in unloading and transit, and the weighment method was relevant to the quantity recorded. The Tribunal relied on an earlier decision in similar facts to disregard handling-related loss where the goods were meant for use in the factory without diversion, and it also noted a Board circular recognising a condonable loss limit. On that basis, the shortage fell within the permissible range and the demand based on the shortage was held unsustainable.

---

---

Issues: Whether the shortage in imported normal paraffin could be treated as permissible loss and whether the demand raised on such shortage was liable to be set aside.

Analysis: The imported product was found to be volatile in nature, and the shortage was considered in the context of the nature of the goods, the losses occurring in unloading and transit, and the method of weighment adopted. Reliance was placed on the earlier Tribunal decision in similar facts, where such loss attributable to handling and receipt of the imported goods was ignored when the goods were intended for use in the factory without diversion. The Board's circular was also noted as recognising a permissible limit of condonable loss.

Conclusion: The shortage was held to be within the permissible limit, the demand on the shortages was not sustainable, and the appeal was rejected.

---