Stock verification of molasses upheld where dip reading was accepted as a recognised measurement method and penalties were sustained

Excess stock of molasses found on physical verification was not successfully disputed where the inspection was conducted in the assessee's presence, the assistant general manager's statement on the inspection date admitted the excess stock, and no satisfactory explanation for the discrepancy was given. Dip reading was treated as a recognised method for measuring liquid in tanks, and the assessee's reliance on other precedents failed because those cases turned on different facts and foam allowance had already been given here. Confiscation, redemption fine and penalty were therefore sustained and the appeal was rejected.

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Issues: Whether the excess stock of molasses found on physical verification could be disputed on the ground that dip reading was an improper method of measurement and, if not, whether confiscation, redemption fine and penalty were sustainable.

Analysis: The stock verification was made in the presence of the assessee and the assistant general manager's statement recorded on the date of inspection contained an admission of excess stock, without any satisfactory explanation for the discrepancy. The Tribunal noted that allowance for foaming had already been granted at 20% while working out the excess quantity. It further noted that dip reading is a recognised method for measurement of liquid in tanks and that the precedents relied on by the assessee did not assist it on the facts, particularly because the factual basis in those cases differed and the allowance for foam had already been considered here.

Conclusion: The challenge to the stock measurement failed and the confiscation, redemption fine and penalty were upheld; the appeal was rejected.

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