Natural transit loss of cement clinker entitled the assessee to full excise exemption in transport between factories.

Loss of cement clinker during transport between factories was treated as a natural transit loss where it arose from movement over a substantial distance and handling, loading, and unloading at intermediate stages. The High Court agreed with the view taken in connected writ petitions and held that such loss remained within the recognised exemption framework, so it was not liable to further excise duty. The assessee was therefore entitled to full exemption for the transit loss.

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Issues: Whether the loss of cement clinker occurring during transport between the assessee's factories was a natural loss entitled to full exemption from excise duty.

Analysis: The loss arose during movement of cement clinker over a substantial distance and was attributable to handling and loading/unloading at intermediate stages. The same question had already been decided in connected writ petitions in favour of the assessee, and the Court expressly agreed with that view. The loss was treated as a natural loss occurring in transit and, therefore, not liable to be burdened with excise duty beyond the exemption already recognised.

Conclusion: The loss of cement clinker in transit was a natural loss and the assessee was entitled to full exemption from excise duty.

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