Reconciliation of excise records with balance sheet defeated duty demand on alleged sulphuric acid shortage.

Demand of duty on alleged differential quantity of sulphuric acid was held unsustainable where the figures in the excise records were reconciled with the balance sheet by reference to opening stock in the next financial year. The earlier year's apparent discrepancy was explained as having been carried forward and accounted for in the subsequent year, along with the remaining balance in the RG-1 account. On that factual basis, the apparent shortage did not support confirmation of the duty demand, and the impugned order was set aside in favour of the assessee.

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Issues: Whether the demand of duty on the alleged differential quantity of sulphuric acid, based on a discrepancy between the excise records and the balance sheet for the relevant year, was sustainable.

Analysis: The quantity shown in the excise records and the quantity reflected in the balance sheet were reconciled by reference to the opening stock in the subsequent year. The difference for the earlier year was explained as having been carried forward and accounted for in the next financial year, along with the remaining balance in the RG-1 account. On that basis, the apparent shortage did not justify confirmation of the duty demand.

Conclusion: The duty demand was not sustainable and the impugned order was set aside in favour of the assessee.

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