Process loss in copper cathode manufacture not dutiable where permission for semi-processed inputs did not cover invisible loss.

Excise duty could not be fastened on process loss arising during manufacture of copper cathode, because the permission for movement of semi-processed inputs was not intended to impose duty on such loss. The Board's circular was read as supporting the position that no duty liability arises on process loss. The condition in the permission letter was construed as covering only losses capable of being insured against, not invisible loss. On that reasoning, the duty demand and associated interest were set aside.

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Issues: Whether excise duty could be demanded on process loss arising during manufacture of copper cathode, and whether the permission condition for movement of semi-processed inputs could fasten liability for such loss.

Analysis: The permission for movement of semi-processed inputs could not be read so as to impose duty on process loss. The Board's circular supported the view that no duty liability arises on such loss. The condition in the permission letter was also construed as relating only to losses capable of being insured against, and not to invisible loss.

Conclusion: The demand of duty and the associated interest were set aside, and the appeal was allowed.

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