TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>CESTAT Hyderabad: Transit loss of cement clinker due to natural factors leads to duty demand relief</h1> <h3>M/s The India Cements Ltd., Versus CCE, C & ST, Hyderabad-III</h3> The Appellate Tribunal CESTAT Hyderabad held that the shortage of cement clinker was due to transit loss caused by natural factors during transportation. ... Remission of duty on loss of goods - cement and cement clinkers - shortage in the quantity of cement clinker exported - natural/normal/unavoidable handling/transit loss? - whether the appellant is liable to pay duty on the short quantity of cement clinker which was cleared from their factory and declared to have exported as per ARE-1 documents? - Held that: - The department does not allege that the shortage occurred due to any positive act on the part of the appellant like fraud/clandestine removal. In such circumstances, it can be safely concluded that the shortage is due to transit loss. The case law UP State Cement Corporation Ltd. [1996 (4) TMI 139 - HIGH COURT OF JUDICATURE AT ALLAHABAD] uphold that there is a chance of shortage due to transit loss in the case of cement clinker. Therefore, I do agree with the contention put forward by the appellant that the shortage was due to transit loss/natural causes - demand not sustainable - appeal allowed - decided in favor of appellant-assessee. Issues:1. Liability to pay duty on shortage of exported cement clinkers.2. Whether shortage occurred due to natural causes during transportation.3. Compliance with conditions of Notification No. 42/2001-CE-NT.Analysis:Issue 1: Liability to pay duty on shortage of exported cement clinkersThe case involved the appellants, engaged in the manufacture of cement and cement clinkers, who were registered with the Central Excise Department. The dispute arose when the department noticed a shortage in the quantity of cement clinker exported by the appellants, leading to the issuance of show cause notices covering the period from 2003-04 to 2005-06. The adjudicating authority confirmed the demand of duty amounting to Rs. 23,54,105/- along with interest and imposed a penalty. The Commissioner (Appeals) upheld the original authority's decision, prompting the appellants to file an appeal before the Appellate Tribunal CESTAT Hyderabad.Issue 2: Whether shortage occurred due to natural causes during transportationThe appellants argued that the shortage in quantity was a result of natural causes during the transportation process from their factory to the ports. They highlighted the steps involved in loading, transportation, and unloading of cement clinkers for export, emphasizing that a certain percentage of loss during transportation is natural. The appellants contended that the loss percentage was within permissible limits and cited judgments where courts had condoned shortages due to natural causes. The department, on the other hand, insisted that the appellants failed to produce proof of export for the declared quantity, making them liable to pay duty on the shortage.Issue 3: Compliance with conditions of Notification No. 42/2001-CE-NTThe department argued that the appellants, by failing to produce proof of export within the stipulated time frame as per Notification No. 42/2001-CE-NT, were in breach of the conditions for export goods without payment of duty under Letter of Undertaking (LUT). The department maintained that the appellants did not provide evidence that the loss occurred due to natural causes, thereby justifying the demand for duty on the shortage of quantity.In the judgment delivered by the Member (Judicial) of the Appellate Tribunal CESTAT Hyderabad, it was held that the shortage of cement clinker was due to transit loss caused by natural factors during transportation. The tribunal relied on precedents where courts had condoned shortages arising from similar circumstances. The judgment set aside the impugned order, allowing the appeal with consequential reliefs. The decision was based on the finding that the shortage was due to transit loss, and there was no evidence of any fraudulent activity by the appellants.
TaxTMI 
TaxTMI 
