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(i) the difference in the readings of the weighing-scales installed at the mines and at the smelter; (ii) the human error in recording the measurement on the weighing scales; and (iii) the shortage due to dryage during the transit of the goods. It was submitted by the assessee that the concentrate, when cleared from mines, was in moist form and during movement, due to atmospheric conditions, there was natural drying of the moisture content resulting in minor difference in the quantity.
"20. I find that in the present case the concentrates are transported from mines to the asessee's smelter plant mainly in dumpers by road therefore possibility of loss of inputs by way of pilferage and theft during the transit can not be denied. Therefore, I do not accept the contention of the assessee that losses shown in the balance sheets are only notional losses which had been occurred due to human error, moisture and weigh bridge difference. I also find that the ratio of judgments cited by the assessee in support of their contention is not applicable in the instant case in view of the fact that in both the cases the inputs were received in packed conditioned as such there remained no possibility of loss due to pilferage or theft during transit and in these cases loss was due to moisture but in the instant case the inputs are not received in packed condition and are transported about 80-100 Km in dumpers. Therefore, I have no hesitation to hold here that in this case the shortage of inputs namely concentrates was due to pilferage or theft occurred during the transit.

In our view, it would be too impracticable and unrealistic to ignore in such a matter the ground realities and the natural causes where the excavated contents were being transported from mines to the factory; and where the contents were susceptible to dryage due to atmospheric conditions apart from the likelihood of some slight error in recording of measurements due to human or mechanical error. In the cited decision reported in 2009 (233) ELT 61 (Raj.), this Court has, of course, considered the provisions of Rule 21 as contained in the Central Excise Rules, 2001 but for their relevance on principles, the following observation could usefully be taken note of:-

Thus, the principles available in the rules and in the law explained by this Court are clear that credit of duty cannot be denied or varied where input has become waste in or in relation to manufacture of final product; and more of practical approach is required to be taken in these matters.

D.B. CENTRAL EXCISE APPEAL NO.30/2008 In a comprehension of the position of facts and application of the relevant principles of law, in the first place, we are unable to find any evidence on record on the part of the appellant that the respondent-assessee had, in any manner, diverted the duty paid inputs with intent to evade duty. Hence, there does not appear any basis to consider it to be a case of "wilful suppression of facts" as indicated in the formulated question. Then, all said and done, the shortage had been of about 0.05% and factors as indicated by the assessee about some difference in the weighing scale or of the human error and of the loss in transit due to drying of moisture contents cannot be ignored altogether.