Factory storage loss is outside Tribunal jurisdiction when goods are already marketable and excisable after manufacture.

Where lubricating oil had already reached the RG 1 stage and become marketable and excisable after manufacture, loss occurring only during movement from bulk storage tanks to kettles and unit containers was treated as storage loss, not processing loss. On that basis, the dispute fell within the exclusion in the First Proviso to Section 35B(1) of the Central Excise Act, 1944, so it was outside the Tribunal's appellate jurisdiction and could not be examined on merits. The commentary therefore distinguishes processing loss from factory storage loss by reference to whether any further manufacturing activity occurred after entry in the register.

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Issues: Whether the dispute regarding loss arising in the factory amounted to a processing loss so as to fall within the Tribunal's jurisdiction, or whether it was only a storage loss excluded from appellate jurisdiction.

Analysis: The lubricating oil had already reached the RG 1 stage after manufacture and had become marketable and excisable. No further manufacturing or processing was shown after entry in the register. The only movement thereafter was from bulk storage tanks to kettles and then to unit containers. On these facts, the loss was attributable to storage operations and not to processing. Since the First Proviso to Section 35B(1) excludes such factory storage loss from the Tribunal's jurisdiction, the matter could not be entertained on merits.

Conclusion: The dispute was held to be outside the Tribunal's jurisdiction and the appeal failed.

Final Conclusion: The claim was not adjudicated on the merits because the Tribunal treated the loss as a non-appealable storage loss within a registered factory.

Ratio Decidendi: Where goods have already become marketable and excisable after manufacture, and the subsequent loss arises only in storage operations within the factory, the dispute is outside the Tribunal's jurisdiction under Section 35B(1) of the Central Excise Act, 1944.

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