TaxTMI 
TaxTMI 
1991 (6) TMI 108
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....ting to the current year. The working of Rs. 6,12,517 claimed as Excise Duty on storage and transit wastage was filed before the AO. It was urged before the AO by the assessee that this being a statutory liability under the U.P. Excise Act, 1910, the same was allowable as business expenditure. The AO observed that this levy of excise duty was in respect of the excess wastage of liquor during storage and transit from distillery to various bonded warehouses. Since the duty was in respect of shortage in excess of the prescribed limit under Excise Rules, according to the AO the same was a penal nature and, therefore, it was not allowable as held by him in the earlier years. 3. Before the CIT(A), it was urged that the excise duty on storage and transit wastage was levied on the assessee under the U.P. Excise Act. This duty is levied under s. 28(1)(c) of that Act. This was, however, held to be not chargeable by the Allahabad High Court, except for transit wastage and liquor transported in bottles. For the assessment year under appeal, the liability, according to the assessee, on transit wastage on bottles duty was Rs. 63,930 and the balance duty was disputed. The Excise authorities ha....
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....id order of the Tribunal needs review in the light of fresh facts. In this connection, he has given a detailed note which is made a part of this order as Annexure 'A'. On the basis of this note, he urged that the claim of the assessee was allowable. 5. The ld. Sr. Deptl. Representative, on the other hand, contended that the issue was squarely covered against the assessee by the order of the Tribunal dt.29th March, 1989in ITA Nos. 4310/and 4039/85 for the asst. yr. 1981-82 in the case of the assessee itself. He, further, urged that since Allahabad High Court had struck down the levy, there was no liability and, therefore, the same was not allowable. He, therefore, supported the order of the CIT(A). 6. We have carefully considered the rival submissions. The Tribunal for the asst. yr. 1981-82 in the case of the assessee itself has rejected the claim. Even a Misc. Application subsequently filed by the assessee, was rejected by the Tribunal covering the point now made out by the assessee. We have considered the detailed note filed on behalf of the assessee. We are unable to accept the proposition for review of the earlier order of the Tribunal. Respectfully following the said orde....
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....ired to be disallowed considering the basic exemption of Rs. 5,000 under s. 80VV. Respectfully following the above order of the Tribunal we are of the opinion that the expenditure which is not allowable under s. 80VV has to be considered under s. 37(1) as not having been incurred in connection with income-tax proceedings before the income-tax authorities, but any other matters like company law matters, consultancy, etc. In view of this position, we are unable to sustain the order of the CIT(A) disallowing deduction of Rs. 13,200. The ITO is directed to allow the same under s. 37(1) of the Act. 11. The third ground of appeal is that the learned CIT(A) has erred in sustaining the disallowance under s. 40A(3) of the Act, of Rs.. 64,484 out of the total disallowance made by the learned IAC at Rs. 95,883. The AO disallowed payments of expenditure in cash in sums exceeding Rs. 2,500 aggregating to Rs. 95,883 in violation of the provisions of s. 40A(3) of the Act. These payments were to as many as 15 parties. According to the assessee, these payments were made in cash in sums exceeding Rs. 2,500 in exceptional circumstances as provided in r. 6DD(j) of the IT Rules, 1962. The AO did not....
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....e spirit was normally sold on advance payment. Further, the payment was made at Hargaon, where the assessee did not have any bank account. Photocopies of the vouchers, cash receipt and copy of the accounts of the party were filed before the AO and the CIT(A). It was, therefore, urged that the identity of the seller was not doubted. The party was assessed to income-tax under PAN 34-300- CN-0142 by the ITO,Central Circle,Bombay. So far as the payments to M/s K.S. Wood Industries, Faizabad is concerned, it is stated that these were made for purchase of wooden boxes. Photocopies of the vouchers, cash receipts and copy of account and confirmation certificates were filed before the lower authorities. The ld. Sr. Deptl. Representative, on the other hand, submitted that there were no exceptional circumstances due to which the assessee could not make the payments by crossed cheques or drafts. 13. The learned counsel of the assessee also submitted that the payment was made in cash on the party's insistence as the assessee was in urgent need of material. According to the assessee, this payment was covered by para 4 of the CBDT's Circular No. 243, dt.18th April, 1969, reported in 108 ITR (S....
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....eceipt issued by Veer Jawan Wood Works showed that the payment was received in the account of the party with the following observations: "Hamaray Hisab Main Jama Kiya Jai." Taking into consideration that both the parties were at Faizabad, where they maintained the respective bank accounts, it could not be accepted in the absence of the evidence that exceptional circumstances existed which compelled the assessee to make the payment in cash. 18. The ld. D.R., on the other hand, has supported the order of the CIT(A). 19. In our opinion, there is no merit in the contention put forth on behalf of the assessee. The CIT(A) has recorded a finding that there was no evidence brought on record by the assessee to show that the cheque earlier issued bounced. Nothing has been brought before us also on this account. Both the parties were maintaining bank account at the same station. There is no evidence available on record that the other party insisted on payment in cash. We, therefore, do not find any merit in this contention. 20. Regarding 3rd item (S. No. 9 of the CIT(A)'s order) the CIT(A) held that the payment was made for the purpose of electric wire. It was stated that this ....
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.... by the CIT(A). 23. Before us, it has been urged on behalf of the assessee that the payment was made to the above party towards the purchase of flowers which is a wild crop. These flowers are collected by villagers of small means. The parties sell in cash because they in turn have to pay to the villagers in cash from whom the flowers are collected. Further, these flowers were purchased as and when required and, hence, considering the urgency and business necessity, the assessee was forced to pay in cash. It was, therefore, urged that it was because of the business necessity and the circumstances of the case that the payment had to be made in cash. The ld. D.R., on the other hand, has supported the order of the CIT(A). 24. In our opinion, looking to the nature of the purchases of flowers, which is for preparing country liquor, which is the business of the assessee, the payment has to be made to the villagers, it constituted an exceptional circumstance. The disallowance is, accordingly, deleted. 25. Regarding Item No. 6 (S. No. 13 of the CIT(A)'s order), i.e., payment made to Raja Ram, Faizabad the same submissions were made as in the case of Item No. 5 in the case of Keswan....
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....ated before the CIT(A) that the purchase of gas cylinders was essentially required and the cash payment was sought by the party, otherwise the business would have been jeopardised. The claim was disallowed by the CIT(A) because it was a regular party. The party maintained bank account and other payments were made by cheque on the same date. According to the learned counsel for the assessee, the payment was covered by para 4(b) of the Board's circular referred to earlier, i.e., because the payment by cheque /draft was not practicable and it would have caused genuine difficulty to the assessee having regard to the nature of business and the necessity for expeditious settlement thereof. The ld. D.R., on the other hand, supported the order of the CIT(A). 32. In our opinion, the claim has rightly been rejected by the CIT(A). It is not understood as and when the assessee made payments on the same day of part amount by cheque, why this small payment could also not be made through cheque. In our opinion, there were no exceptional circumstances which prevented the assessee from making the payment through crossed cheque/draft. The disallowance is accordingly sustained. 33. The fourth g....
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....urged that the loss was allowable for the asst. yr. 1982-83. In this connection, he has relied upon the judgment of Hon'ble Allahabad High Court reported as CIT vs. U.B.S. Publishers & Distributors (1983) 34 CTR (All) 86 : (1984) 147 ITR 114 (All). 35. The ld. D.R., on the other hand, has supported the order of the CIT(A). 36. The other loss claimed is of Rs. 62,866. The CIT(A) did not allow the claim of debts having become bad on account of evidence. The learned counsel for the assessee claimed that these were business losses and, therefore, are admissible as deduction in view of the judgment of the Hon'ble Madhya Pradesh High Court reported as (1988) TLR 1048 and of the Bombay High Court reported as Jethabhai Hirji and Jethabhai Ramdas vs. CIT 1978 CTR (Bom) 415 : (1979) 120 ITR 792 (Bom). The ld. D.R., on the other hand, submitted that no evidence was brought on record by the assessee to show that any efforts were made to recover the same and they had really become bad. In such circumstances, he supported the order of the CIT(A). 37. We have given our careful consideration to the rival submissions. So far as the loss on a/c of leakage of molasses of the value of Rs. 1,4....
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.... was challenged by the assessee before the CIT(A). Before the CIT(A), it was urged that the restriction of breakage to 5 per cent was arbitrary and not based on any material. It was stated that the breakage/damage in the bottles is a result of various factors, particularly the circumstances involved and the nature of the assessee's business. According to the learned counsel for the assessee, the empty bottles purchased are both new and old. The bottles are packed in gunny bags and transported through trucks by road/rail and due to mishandling, there occurs breakage on the way. Then after the receipt of the bottles at the godown, they are unpacked, washed, labels are removed and are sent for labelling and filling, etc. Since the entire operation was done manually, the breakage was bound to occur. It was, therefore, urged that the wastage should have been worked out on bottles actually handled and not on the bottles consumed. It was also submitted before the CIT(A) that, in the earlier years, the Revenue authorities had considered the yard-stick through the number of bottles only and not actually consumed. If the breakage was calculated as compared to the number of bottles handled, i....
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....ect of excessive wastage. For the asst. yr. 1981-82, the CIT(A) restricted the wastage to 11 per cent and this was made after holding that though it was not feasible to maintain the record of breakage at each stage, while the same should have been made periodically at least. Agreeing with the observations of his predecessor that the breakage is the normal feature of the trade, the CIT(A), however, held that the reasonableness of the same had to be seen in respect of the assessee's own history as compared to the earlier years. It was also observed that no factors were pointed out which led to the excessive breakage in the asst. yr. 1982-83 as compared to the one declared in the asst. yr. 1980-81. The CIT(A), therefore, restricted the reasonable breakage to 11 per cent as against 12.17 per cent claimed by the assessee. Thus, breakage at this percentage worked out to 10,33,047 bottles as against the breakage claimed at 11,88,716 bottles. The breakage to the extent of 1,55,069 bottles was considered as excessive and disallowed. The same was valued by the CIT(A) at Rs. 1.43 per bottle, as valued by the AO. The CIT(A), therefore, sustained the addition to the extent of Rs. 2,21,749 there....
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....r of the Company Law Board dt.30th Aug., 1979has been placed in the paper books which makes it clear that the obligatory cost element relates to the industrial alcohol. He also pointed out that the Tribunal's observations for the asst. yr. 1981-82 in relation to the Notes No. 3 & 8 of the Auditor's report in the published accounts for the asst. yr. 1981-82 was in the context of determining the claim for breakage. The learned counsel for the assessee pointed out that if an enquiry had been made from the assessee at that stage; the position would have been clarified. He submitted that Note 3 relates to the finished goods and raw material and stores and spares. As regards the finished goods and raw materials, there was no dispute that physical verification was complete and there was no stock discrepancy. Regarding the stores and spares, it is stated that these were shown at Rs. 14,48,850.97 at cost and reflected a balance sheet item shown under the head Current Assets (Schedule 7). It was, therefore, urged that it was not part of the closing stock and as such it did not figure in the trading account at all. Therefore, the pendency of physical verification of such stocks carried no rel....
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....He, therefore, urged that the addition sustained by the CIT(A) should be deleted. 44. The ld. D.R., on the other hand, stated that the CIT(A)'s order for the asst. yr. 1981-82 should not be considered as he had exceeded his jurisdiction in not accepting the observations of the Tribunal in the remand order. He, therefore, urged that the breakage of bottles allowed of 750 ml by the AO at 5 per cent is quite reasonable. He supported the order of the Assessing Officer. 45. We have given our careful consideration to the rival submissions. The assessee has given a detailed note on the observations of the Tribunal with reference to the audit note in its order for the asst. yr. 1981-82, which we have referred to earlier. The learned counsel for the assessee has given explanation, which we have referred to in the earlier part of the order. On going through the records placed before us on behalf of the assessee which were also before the CIT(A), we are of the opinion that certain errors have crept in the order of the Tribunal for the asst. yr. 1981-82. This happened because the Tribunal made certain references to certain audit notes and made certain observations in a passing manner, wi....
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.... breakages of bottles of 750 ml. The CIT(A) was not justified in restricting the breakage to 11 per cent as against 12.17 per cent claimed by the assessee. In view of these submissions, we find merit in the ground of appeal of the assessee. At the same time, we do not find any merit in the cross-ground of appeal by the Revenue. 47. The 6th ground of appeal by the assessee is that the CIT(A) has erred in sustaining the disallowance of a sum of Rs. 11,28,000 in excise duty relatable to prior years provided for and written off in the relevant accounting year. The assessee claimed a deduction of Rs. 6,12,517 for storage transit waste duty in excess of the limits prescribed by the excise laws. The learned counsel for the assessee conceded that the issue was decided against the assessee by the Tribunal for the asst. yr. 1981-82, but contended that the decision of the Tribunal needed review in view of the detailed arguments given against the Ground No. 1 of the appeal. He, therefore, urged that the claim of the assessee should be allowed. The ld. D.R., on the other hand, has contended that the issue is squarely covered against the assessee by the order of the Tribunal for the asst. yr.....
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....se of M/s Saraswati Marketing Co. Ltd. for the asst. yr. 1979-80, wherein it was held that the interest was not chargeable in case resolution was passed prior to the commencement of the accounting year. It was also stated that there was no nexus between the borrowings of the assessee-company and the amounts advanced to M/s Narang Breweries. The CIT(A) observed that from the perusal of the Tribunal's order for the asst. yr. 1978-79 in ITA No. 3146/82, it was found that the contention of the assessee was not accepted by the Tribunal on the ground that the assessee was following mercantile system of accounting, the amount payable or receivable had to be taken on accrual and due basis. It was, therefore, held that the interest was due to and receivable by the appellant company from M/s Narang Breweries and as such it was includible in the total income of the assessee company. Another plea taken before the CIT(A) was that since the assessee was a partner in the firm, the share of the partner in the income or loss of the firm had to be computed under sub-s. (1) of s. 67 and as such, the only amount which was earned from the firm was to be taxed, was also rejected. The CIT(A) further obse....
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....ng up interest from M/s Narang Breweries, no interest accrued for the accounting period, i.e., calendar year 1981 relevant to the asst. yr. 1982-83 under appeal. He also urged that the CIT(A) in earlier part of her order had referred to the resolution passed on 22nd Oct., 1980 (inadvertently mentioned as 22nd Dec., 1980), but while arriving at the conclusion, merely referred to the resolution of May 1981 which was nothing else but reiteration of the resolution passed on 22nd Oct., 1980. He, therefore, urged that, in the ratio of the order of the Tribunal in the case of Saraswati Marketing Co. Ltd. the claim of the assessee was allowable. He also placed reliance on the judgment of the Hon'ble Supreme Court in the case of CIT vs. Birla Gwalior Ltd. 1973 CTR (SC) 349 : (1973) 89 ITR 266 (SC) which was followed as being directly on point by the Punjab and Haryana High Court in Shiv Prakash Janak Raj & Co. vs. CIT 1978 CTR (P&H) 102 : (1978) 112 ITR 872 (P&H). As no date had been fixed under cl. 3 of the Partnership Deed of the borrower firm for the payment of interest and the assessee company here having given up the right to interest before the debtor firm made up its accounts for thi....
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....rest because it was a matter between the assessee and the other partners of the firm and it was not as if the firm was a separate juridical entity by itself. Therefore, it was by a mutual understanding between the assessee and the other partners of the firm that it was agreed that no provisions for interest would have to be made in the firm's books. Further the law does not require any agreement in writing for this purpose. Evidence for the conduct of the parties by way of resolution and relevant entries in their books of account established such a change in the terms of agreement relating to interest payment. According to the learned counsel for the assessee, this position was made clear by s. 11 of the Indian Partnership Act, 1932, but unfortunately this could not be brought to the notice of the Tribunal for the asst. yr. 1981-82. He further stated that certainly there was no law compelling any taxpayer from giving up the right to income before it accrues or even after it accrues. Further, the auditors of the firm had mentioned in their report that the interest on the partners' accounts for the year ending30th Nov., 1980had not been provided. This, according to him, was perfectly....
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....been placed in the paper book. The resolution reads as under: "The Board considered the debit balance of Rs. 17,66,742.63 standing in the name of our partnership concern, M/s Narang Breweries and resolved that no interest be charged from them as the concern is not in a position to pay and is not working at present". 54. On page 101, statement of losses of Narang Breweries from30th Nov., 1969to30th April, 1986has been filed. As on30th Nov., 1981, relevant to the asst. yr. 1982-83, the cumulative losses have been shown at Rs. 2,31,40,074. As on30th April, 1986, the cumulative losses have swelled up to Rs. 3,52,14,029. From the above state of affairs, it is apparent that the financial position of M/s Narang Breweries is very precarious. In such circumstances, the assessee company was obliged to resolve that no interest be charged from them as the concern was not in a position to pay the same. The CIT(A) has upheld the payment upto31st May, 1981on the basis of this resolution and deleted the same for the subsequent period. Her approach to our mind is not correct. It is settled law that profits accrue for the purpose of income-tax at the end of the accounting period. During the co....
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....asst. yr. 1981-82. However, we notice, as canvassed by the learned counsel for the assessee, the judgment of the Hon'ble Surpreme Court in the case of Birla Gwalior Ltd. and that of the Punjab and Haryana High Court in Shiv Prakash Janak Raj Co. and of the Tribunal in the case of Saraswati Marketing Co. Ltd. were not brought to the notice of the Tribunal in that year or for that matter even for earlier years. In view of the fact that the ratios of these judgments are squarely applicable to the case of the assessee and these cases not having been brought to the notice of the Tribunal in the earlier years, we have no hesitation in making a departure from the earlier order of the Tribunal for the asst. yr. 1981-82. In view of the detailed discussions and also the submissions of the learned counsel for the assessee, we are unable to sustain the addition of interest upto31st May, 1981. Consequently we also hold that the CIT(A) was justified in deleting the interest for remaining period from 1st June onwards. We, therefore, find merit in the ground of appeal by the assessee and the ground of the Revenue deserves to be rejected. 55. 8th and 9th Grounds of appeal by the assessee read as....
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....counting, no deduction can be made unless ascertained and enforceable liability exists, not even if the liability is likely to be enforced in future. He also relied on their Lordships observation in the case of (All), their Lordships of Allahabad High Court observed that, in mercantile system of accounting, no deduction can be made unless ascertained and enforceable liability exists, not even if the liability is likely to be enforced in future. He also relied on their Lordships observation in the case of Deepchand Shyam Sunder vs. CIT (1980) 17 CTR (All) 75:(1980) 125 ITR 724 (All). As regards the collection made by the appellant from the buyers, it is stated by the IAC(A) that, as held in the case of Deccan Hides, 142 ITR 175 the excess sales-tax collected constitutes a trading receipt and is an income liable to tax. This is also stated to be as a law laid down by their lordships of Supreme Court in Chowringhee Sales Bureau vs. CIT 1973 CTR (SC) 44:(1973) 87 ITR 542 (SC). It is, thus, submitted that obscuration duty could not have been allowed as a liability in the asst. yr. 1982-83. 15.2 The AR, on the other hand, submitted that complete records of the duty leviable are being ....
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....s regards reliance placed on 105 ITR 864, while discussing levy on storage and transit charges, I have already held that facts are distinguishable. As regards 136 ITR 464, the facts are not on all fours with that of the case of the appellant. There the question related to excess local taxes collected by the lessor and there was a Court decree requiring the party to refund the amount. In this case the amount has been recovered as a part of sale price and there is no decree to refund the amount to the party. Therefore, the ratio laid down in that case is not applicable to the appellant's case. Further, as the amount stood collected, the theory of real income does not come in picture at all. As stated earlier, the amount collected constituted a trading receipt and, as such, no deduction could be allowed in the asst. yr. 1982-83. The deduction could only be allowed in the year when it stood repaid to the parties. In view of the matter, the claim of the appellant is not allowable. 57. The assessee collected obscuration duty from its customers aggregating to Rs. 13,04,307 under the U.P. Excise Act. It appears that the assessee had challenged the levy of duty in the Allahabad High Cour....
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....ggrieved by the above order of the CIT(A), the assessee has preferred the appeal before the Tribunal. The same arguments have been repeated before us and reliance has been placed on a number of judicial pronouncements. Alternative claim was also pressed. The ld. D.R., on the other hand, has referred to the order of the Tribunal for the asst. yr. 1981-82 referred to earlier and contended that the Tribunal had already rejected the claim. He further pointed out that the nature of the claim was similar to the one as claimed in ground No. 1 which already stands rejected by the Tribunal. He, therefore, submitted that all his arguments in ground No. 1 should be adopted in these grounds also. He also contended that the alternative claim for deduction of Rs. 6,21,225 also could not be allowed in view of the reasons given by the CIT(A). 59. The learned counsel for the assessee, on the other hand, stated that, so far as the alternative claim is concerned, the Tribunal has not considered the same for the asst. yr. 1981-82 and, therefore, the same should be considered and decided on merits. 60. We have given our careful consideration to the rival submissions. In our opinion, the nature of....
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....d has not totally quashed the interest levy especially considering that the said interest was charged without affording lawful opportunity in this matter to the assessee and further especially considering that the said interest was capable and liable to be waived under the provisions of the IT Act, 1961. However, at the time of hearing of the appeals, the learned counsel for the assessee stated that these two grounds were only consequential in nature and, therefore, called for no specific consideration. We do not, therefore, find any merit in these two grounds of appeal. Undoubtedly, the Assessing Officer will recalculate the interest under s. 139(8) and s. 217 after giving effect to our order. 62. Ground Nos. 12, 13 & 14 are general in nature and, therefore, they call for no specific consideration. 63. This finishes up the appeal by the assessee. We shall now take up the appeal by the Revenue, being ITA No. 286/87. 64. In the Revenue's appeal, there are three grounds. The second and third grounds of appeal are regarding the breakage of empty bottles and deemed interest on debit balances of Narang Breweries. These two grounds have already been considered and disposed of wh....
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.... asst. yr." The further discussion by the Court related to the peculiar factual context of that case. The Delhi High Court did not modify in any way the clear position laid down by the Supreme Court in Kedarnath Jute Mfg. Co.'s case. (iv) The effect of ss. 28 and 77 of the U.P. Excise Act 1910 was apparently not brought to the notice of the Tribunal. If that had been done it would not have perhaps held that under the Rules of the U.P. Excise Manual a liability arises to the assessee only when an appropriate order is received by the assessee from the Excise Department. The Rules do not say and cannot say that the liability under the U.P. Excise Act will be fastened upon the assessee only after the Inspector obtained an explanation and the explanation was considered and rejected by the higher authorities. The only rules relevant are 492 and 814. Rule 813 is not at all relevant as it concerns duty on excess wastage in storage in the distillery. No such loss has been claimed by the assessee at any time. Unfortunately the CIT(A) has wrongly proceeded on the basis of only this rule (R-813) to dismiss the assessee's claim for the asst. yr. 1982-83. A copy of the Notification containing....
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....t the assessee was liable to pay the excise duty. It was for this purpose that (1983) 33 CTR (All) 221: (1983) 143 ITR 771 (All) was cited but unfortunately the Tribunal even though it noticed this decision overlooked the above position in law and recorded a conclusion on a point of law contrary to that laid down by the Allahabad High Court. There were three points of distinction made by the Tribunal in para 6.6 of its order. None of them seems to be valid in law because (i) In the light of Kedar Nath Jute supra these need not be any provision made or entry made in the books if assessee is following the mercantile system. The claim can be made after the return is filed but before the assessment is complete. (ii) The fact of excise authorities still raising demands is of no significance where the method of accounting has already been mercantile. (iii) The "amendment" referred to issued w.e.f.29th Feb., 1979where the assessment years concerned were 1964-65 to 1972-73, i.e., the amendment has no significance. (iv) Lastly though the decision cited is (1983) 33 CTR (All) 221:(1983) 143 ITR 771 (All) the Tribunal confined itself to discussing the facts of J.K. Synthetics Ltd.....
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....ly the ratio of (1981) 132 ITR 457 which is directly in point here. (x) The decision in Tribunal vs. B. Hill & Co. (P) Ltd. (1982) 29 CTR (All) 301: (1983) 142 ITR 185 (All) was not applied by the Tribunal in favour of the assessee because. (a) No demand was raised by the Excise Deptt. (But in 29 CTR (All) 301: 142 ITR 185 also no demand was raised by the ST Deptt.). (b) In 29 CTR (All) 301: 142 ITR 185 the assessee's writ petition disputing the sales-tax liability was pending before the High Court. On the other hand the Allahabad High Court had struck down the excise duty on excess wastage in the assessee's case here. (Unfortunately, the Tribunal overlooked the fact that an SLP has been filed by the Excise Deptt. before the Supreme Court and has been admitted and, hence, the matter is still sub judice). The assessee itself in its accounts had treated the liability as a contingent liability was another reason given by the Tribunal. But the assessee's claim is based on 82 ITR 363. Hence, in law it is entitled to the deduction regardless of what view it took. Secondly as regards this year there is a specific provision in books for this liability. (xii) The Tribunal ....
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....he matter will be referred to the Excise Commissioner for orders. Rule 814 under the U.P. Excise Act, 1910 Allowance for loss in transit: An allowance upto 0.5 per cent will be made for the actual loss in transit by leakage, evaporation on to other unavoidable cause, of spirit transported or exported under bond in wooden casks or metal vessels. The allowance to be made under this rule will be determined by deducting from the quantity of spirit despatched from the distillery the quantity received at the place of destination, both quantities being stated in terms of alcohol. The allowance will be calculated on the quantity contained in each wooden cask metal vessels comprised in a consignment. If the report of the officer by whom the consignment of spirit has been gauged and proved at its destination shows that the wastage has occurred above the limit allowable, the person executing the bond shall be liable to pay duty on so much of the deficiency as in excess of the allowance. The rate of duty leviable shall be the highest rate of duty leviable on such spirit in this State. When the wastage does not exceed the prescribed limit, no action need be taken by the Officer-in-Char....