Normal transit loss does not defeat concessional duty for inputs imported for intended manufacturing use.

Concessional duty under Notification No. 12/2012-CUS could not be denied merely because imported crude palm oil suffered normal transit loss through leakage, spillage, viscous residue or accident. The Tribunal applied the principle that eligibility depends on whether the goods were brought for a specified manufacturing purpose, not on whether every quantity physically remained intact, and treated the admitted shortage as normal transit loss promptly disclosed by the importer. On that basis, the goods were still regarded as intended for manufacture, the denial of concessional duty was held unsustainable, and the assessee's claim was accepted.

---

---

Issues: Whether concessional duty benefit under Notification No. 12/2012-CUS could be denied on the quantity of imported crude palm oil lost in transit.

Analysis: The appeal turned on whether the imported goods, though partly lost in transit because of leakage, spillage, viscous residue and accident, could be treated as not used for the intended manufacture. The Tribunal followed the binding precedent that the relevant rule operates on the basis of goods being intended for use in manufacture, and that loss on account of leakage or damage does not materially differ for this purpose. On the admitted facts, the shortage was a normal transit loss, promptly disclosed, and the material was nevertheless brought for and put to the intended manufacturing use.

Conclusion: The denial of concessional duty benefit was unsustainable and the issue was decided in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where imported inputs are brought for a specified manufacturing purpose, normal transit loss by leakage, spillage or damage does not defeat eligibility to concessional duty benefit meant for goods intended for use in manufacture.

---