Specific-rate excise duty cannot be demanded solely for excess quantity in bags without independent legal sustainability.

Where excise duty is chargeable on a specific basis, mere overfilling of bags or excess quantity in containers does not automatically create duty liability. The CESTAT held that the demand could not be sustained on the facts because the revenue's reliance on a stock-taking precedent was misplaced; the present demand arose from verification of records and statements to work out differential duty, not from a stock-taking situation. Duty was therefore not payable on the excess quantity, and the order in favour of the assessee was affirmed while the revenue's challenge failed.

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Issues: Whether duty was payable on the excess quantity filled in bags in the manufacture of excisable goods.

Analysis: The Tribunal held that the demand could not be sustained on the facts of the case. It applied the earlier view that where excise duty is leviable on a specific basis, mere overfilling of bags or excess quantity in containers does not, by itself, justify a duty demand. The reliance placed on the stock-taking based precedent was found inapposite because the present demand arose from verification of records and statements for working out differential duty, not from a stock-taking situation.

Conclusion: Duty was not payable on the excess quantity, and the Revenue's appeal failed.

Final Conclusion: The order in favour of the assessee was affirmed and the Revenue's challenge was rejected.

Ratio Decidendi: Where excise duty is chargeable on a specific basis, excess quantity filled in bags does not automatically create a duty liability unless the demand is otherwise legally sustainable on the facts and applicable law.

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