Processing shrinkage claims require reconsideration when technical evidence and precedent orders support a higher natural loss allowance.

Processing shrinkage in man-made fabrics must be reconsidered where the assessee produces accounts, technical support, and comparable precedent orders, and the original authority has not adequately examined that material. The dispute concerned stock shortage treated as natural shrinkage, with the lower orders allowing only a limited percentage without dealing with the documentary record or the request for verification during processing. The matter was therefore remitted for fresh adjudication under Rule 223A, with hearing to be given to the assessee and the evidence reassessed before any final determination.

---

---

Issues: Whether the shortage claimed as processing shrinkage in man-made fabrics was required to be reconsidered under Rule 223A, and whether the matter should be remanded for fresh adjudication on the basis of the documentary and technical material produced by the appellant.

Analysis: The dispute concerned loss noticed during stock taking in processed fabrics and the extent to which such loss could be treated as natural shrinkage. The record showed that the appellant had maintained accounts, had sought the presence of excise officers during processing to verify the loss, and had also produced precedent orders and a technical report supporting the claim of higher shrinkage. The lower orders had proceeded on a limited allowance of 2% without adequately dealing with the appellant's material or the comparable precedent orders. In these circumstances, the question was not finally determined on merits but required reconsideration by the original authority after taking the additional material into account and giving the appellant an opportunity of hearing.

Conclusion: The matter required fresh consideration under Rule 223A, and the findings of the lower authorities could not be sustained without reconsideration of the appellant's evidence.

Final Conclusion: The appeal succeeded to the extent that the impugned orders were set aside and the dispute was remitted for de novo adjudication after hearing the appellant and considering the technical and precedent material.

Ratio Decidendi: Where a claim of processing loss or shrinkage is supported by records, technical material, and comparable precedent orders, refusal to consider that material requires the matter to be reopened for fresh adjudication under the discretionary provision governing condonation of shortage.

---