Permissible packing variation in cement bags defeats duty demand where excess weight is marginal and unexplained clearance is not proved.

Excess weight found in cement bags did not justify duty demand or penalties where the discrepancy was marginal and within permissible packing variation. The Tribunal noted that only 10 bags were weighed, part of the difference was explained by tare weight, and the Board's circular allowed 1% variation for cement bags. It also referred to the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, which permit a 2% error for cement packing. The managing director's statement was not treated as an admission of clandestine clearance or receipt of consideration, and the demand with connected penalties was held unsustainable.

---

---

Issues: Whether duty demand and penalties could be sustained on the excess weight found in cement bags having regard to the permissible variation in packaged commodities and the Board's circular.

Analysis: The Tribunal found that only 10 bags were weighed, the excess was marginal, and the tare weight explained part of the difference. It relied on the Board's circular allowing 1% variation for cement bags and on the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, which permit a 2% error for cement packing. The statement of the managing director was not treated as an admission of clandestine clearance or receipt of consideration for excess quantity. The Tribunal also followed the earlier view that minor variation in cement packing does not justify duty demand where the discrepancy is within permissible limits.

Conclusion: The demand of duty and connected penalties were not sustainable.

---