Factual estimation of yarn consumption supported sustaining relief where post-closure exports required allowance for manufacturing use.

The Tribunal sustained relief for yarn purchased after closure of manufacturing activity because the exported goods could not be explained without allowing for yarn reasonably used in their manufacture. Although no manufacturing was done after 30 September 1965, it estimated yarn consumption from export weight, yarn purchases, estimated wastage, and the value of closing stock shown by the assessee. The relief was therefore upheld on factual estimation supported by the record, and the issue was decided against the Revenue and in favour of the assessee.

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Issues: Whether the Tribunal was right in sustaining the relief of Rs. 14,000 in respect of yarn purchased after the closure of manufacturing activity.

Analysis: The Tribunal recorded that no manufacturing was done after 30 September 1965, but the goods exported could not be explained without allowing for the yarn reasonably utilised in their manufacture. It estimated the yarn consumed on the basis of the export weight, yarn purchased, estimated wastage, and the value of closing stock shown by the assessee. On those findings, the relief was upheld on a factual estimation supported by the record.

Conclusion: The question was answered in the affirmative and the relief was sustained; the issue was decided against the Revenue and in favour of the assessee.

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