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2013 (3) TMI 481 - HC - CustomsTransit loss - Naphta - According to the Revenue offsetting of gain observed in one product against loss observed in another product is permissible only in cases where unloading of two compatible type/same type of products are effected through one set of pipeline at one location where the possibility of inter mixing of the product exists. In the present case, since the product unloaded at all the three terminals being same, according to the Revenue offsetting the gain occurred at Vasco to the loss occurred at Mangalore could not be acceded to. Held that:- As per Circular No. 55 of 1989, dated 15-12-1989 the storage loss and handling loss should be taken up for condonation on accumulative basis month wise as per the guideline dated 1-6-1956 and 2-3-1959. All the authorities below committed error in holding that if a part of the quantity liable to be discharged at Mangalore is discharged at Vasco then there would be transit loss at Mangalore and transit gain at Vasco. As noted earlier, transit loss can be computed only after the entire quantity is discharged and with reference to the total discharge at each of the destination. In this view of the matter the decision of the authorities below in holding that there is transit loss/transit gain and that the transit loss exceeds 1% and therefore the assessee is liable to pay duty with interest cannot be sustained. - Decided in favor of assessee.
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