Tribunal overturns duty demand on raw material, citing invisible manufacturing losses.

The Tribunal allowed the appeal of the Appellants, a 100% EOU, in a case concerning duty demand on unaccounted raw material from job workers. The Tribunal upheld the Appellants' claim of invisible manufacturing losses, emphasizing the industry-specific nature of such losses. It was noted that the Revenue failed to consider the invisible loss and lacked evidence of identifiable goods manufactured at the job worker's end. Consequently, the duty demand was deemed unjustified, and the lower authority's order was set aside, granting consequential relief to the Appellants.

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Issues:
1. Duty demand on raw material not accounted for from job worker.
2. Consideration of invisible loss in manufacturing process.
3. Applicability of case law on identifiable waste to the present case.

Analysis:
1. The Appellants, a 100% EOU, were issued a show cause notice demanding duty on unaccounted raw material from job workers. The Appellants claimed the shortages were due to invisible manufacturing losses like gases and fine powder released during processing, which were not considered by lower authorities.

2. The Appellants argued that the issue of invisible loss was settled in a previous CESTAT decision. They contended that the invisible loss was not accounted for by the Revenue, and no evidence was provided to prove identifiable goods were manufactured at the job worker's end. The Tribunal upheld the Appellants' claim of invisible loss, crucial to the case, and noted the industry-specific nature of such losses.

3. The Revenue, represented by JDR, argued against applying the previous case law on identifiable waste, stating that the present case lacked evidence of identifiable goods and the 20% loss claimed was unacceptable. However, the Tribunal found in favor of the Appellants, emphasizing the disclosure of manufacturing loss in the Appeal Memorandum and the lack of consideration by the Revenue, leading to the duty demand being unjustified. The Tribunal allowed the appeal, setting aside the lower authority's order and granting consequential relief to the Appellants.

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