HINDUSTAN ZINC LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This order will dispose of the above captioned two appeals being interlinked. Appeal No. E/257/03 has been preferred against the impugned order -in -original, dated 11/12 -11 -2002 vide which the adjudicating authority (Commissioner) has disallowed remission of duty in respect of concentrates of zinc and lead, lost due to natural causes during the period 1997 -98 to 2000 -2001, while the second appeal No. E/2402/03 has been directed against the impugned order -in -appeal, dated 9 -6 -2003 through which the learned Commissioner (Appeals) has confirmed duty demand in respect of the same goods i.e. zinc and lead concentrates, which according to the appellants; were lost due to natural causes. The learned Counsel has contended that remission of duty has been wrongly disallowed by the learned Commissioner for having not taken into account the total production of zinc and lead concentrates during the period in question and the percentage of loss occurred during this period, which was due to natural causes. According to the Counsel, zinc and lead concentrates were stored in an open space by the appellants and some loss in the quantity was bound to occur naturally as well as by handling the same while transporting from the storage place after doing bulk packing, for marketing purposes. He has referred to the table which is at page 23 of the paper book, wherein the total production and the percentage of loss has been detailed. He has also referred to the accounting policy of the appellants, who at the relevant time were a Public Sector Undertaking, under which the shortage @ 1.5% and 2% in a case of storage of zinc and lead concentrates at open place, was made permissible. The learned Counsel has also in support of his contention referred to the decision of the Division Bench of the Tribunal (Bangalore Bench) rendered in the appellants' own case reported in 2004 (172) E.L.T. 244 (Tri.) = 2004 (63) RLT 400 wherein the denial of credit on the loss of 1% to 1.5% inputs (zinc and lead concentrates) was set aside by observing that this percentage of loss was reasonable. On the other hand, the learned SDR has reiterated the correctness of the impugned order. She has contended that the loss of the goods was not proved to be due to natural causes and as such remission of duty has been rightly disallowed to them. She has also contended that in the earlier appellants' own case referred by the Counsel the loss was a handling loss, relating to the inputs and as such has no application to the present case.

(2.) We have heard both the sides and gone through the record. From the record, we find that the appellants at the relevant time were PSU. They were engaged in the manufacture of zinc/lead metal concentrates falling under Chapter 26 of the CETA. These concentrates were stored by them during those years in the open place. The perusal of the chart submitted by them reveals that during the year 1997 -98 and 1998 -99, the loss of zinc and lead concentrates was 0.52% and 0.69% respectively, while of the lead concentrate during the period 1998 -99 and 1999 -2000 was 0.3% and 0.95% respectively. Similarly, the loss of zinc concentrate during 1999 -2000 and 2000 -2001, was of 0.93% to 0.95%.

(3.) In the light of the discussion made above, in our view, the impugned orders in both the appeals, cannot be sustained and are set aside. Consequently, both the appeals of the appellants are accepted with consequential relief as per law.