2025-VIL-379-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Transit loss, Export warehousing – Appellant is engaged in the manufacture and clearance of excisable goods, i.e., petroleum products including Naphtha. HMEL cleared Naphtha from their refinery, without payment of duty/in-bond against CT-2 - Department observed that the entire quantity of Naphtha cleared against the CT-2 was not received at the warehouse, and HMEL claimed a transit loss during transportation - Department issued SCNs proposing the demand of Central Excise duty on the transit loss – Whether appellant is entitled to claim condonation of transit loss up to 1% in light of Circular dated 30.10.1985 – HELD - the issue is no longer res integra, as various courts have allowed the condonation of transit loss up to 1% in light of Circular dated 30.10.1985. The Department had misinterpreted the Circular and held that it is applicable not only for clearance for home consumption but also for export warehousing - The Tribunal relied on the decisions of the Gujarat High Court and the CESTAT, which had held that the Circular dated 30.10.1985 is still valid and applicable for transit loss up to 1% in case of export warehousing. The notification dated 26.06.2001, which provided for export warehousing, was never withdrawn, and the facility of removal of goods to a warehouse and subsequent export therefrom continues to be available. Therefore, the Tribunal upheld the order of the Commissioner (Appeals) which had allowed the condonation of transit loss up to 1% in accordance with the Circular dated 30.10.1985 – The Revenue appeal is dismissed
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