Full Judgment
2. The respondents was engaged in the manufacture of aerated water falling under Chapter Heading 22 of the Central Excise Tariff Act. In the monthly returns filed by the party for the months of April, 1998 to December, 2003, it was found that the appellant was substracting some quantity of aerated water bottles on the ground that the same had been destroyed/broken during handling/loading them.
3. It appears that relying upon the Board's Circular dated 17-9-75 the respondent was calculating breakages on monthly basis and making adjust- merits. According to the respondents, clearance effected during the month were to be taken on the basis of written off breakages upto 0.5%, where breakages of bottles were due to falling in the course of movements from manufacturing place to the bonded store room, during the course of storage, and clearances therefrom.
4. The learned authorised representative for the department has argued that the Board's Circular was issued on 17-9-75 and since the respondents had not reversed the modvat credit relatable to the quantity claimed as breakage, duty was payable even on such goods, especially when the appellant was not informed about the breakages which could have enabled the appellant to verify the truth.
5. There was no allegation made in the show cause notice nor any contention raised on behalf of the revenue at any stage till now that the benefit of the Circular could not be claimed by the appellant or that they were not entitled to the benefit because Modvat credit relatable to the quantity of the breakages was not reversed.
6. It was argued that the respondent was required to file a remission claim which was not done. There is no reason to discard the Circular issued by the Board on 17-9-75 which enabled the manufacturer to make adjustment at the end of the month in respect of breakages up to 0.5%.
When such general orders were issued and the breakages were below 0.5% due to handling which fact was not disputed, the benefit of the Circular could not have been denied to the respondents. Regular monthly returns filed by the respondents indicated their claim in respect of breakages of aerated water bottles which was below 0.5% as stated on behalf of the respondents without any dispute. There is, therefore, no case made out for granting interim stay of the impugned order. The stay application is, therefore, rejected. The appeal will come up for regular hearing in its due course.