Duty demand on alleged cotton beltings failed where evidence and a single sample did not conclusively prove dutiable classification.

Duty and penalty could not be sustained on a presumption that clearances described as hair beltings were in fact processed cotton beltings. The record lacked conclusive documentary proof that all disputed clearances answered the dutiable description, and the assessee's figures were not an admission of conversion. A sample tested on 7-6-1980 could support only the lot from which it was drawn, with no established basis for applying that result prospectively to later clearances. As the evidence did not conclusively establish the dutiable character of the goods, the benefit of doubt went to the assessee and the demand and penalty were set aside.

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Issues: Whether duty could be demanded and penalty sustained on the basis that the clearances described as hair beltings were in fact processed cotton beltings.

Analysis: The record did not contain documentary evidence conclusively establishing that all the clearances described by the assessee as hair beltings were actually processed cotton beltings. The figures furnished by the assessee did not amount to an admission that the goods were processed cotton beltings, and the authority below could not presume such a conversion merely from the statements supplied. The sample tested on 7-6-1980 could be relied upon only for the lot from which it was drawn, and there was no established practice permitting prospective adoption of that result for subsequent clearances. Further, after 7-6-1980 there were no clearances of hair beltings of more than 15 cm width that could be treated as cotton beltings for duty purposes.

Conclusion: The demand for duty and the penalty were not sustainable, and the assessee was entitled to the benefit of doubt.

Final Conclusion: The appeal succeeded and the order under challenge was set aside.

Ratio Decidendi: Duty liability and penalty cannot rest on presumption or a single sample unless the evidence conclusively establishes that the disputed goods in the relevant clearances answer the dutiable description.

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