Average-weight stock variation justified partial penalty deposit where excess was substantial, but marginal discrepancies warranted stay relief.

Pre-deposit relief in stock-related penalty appeals depended on the extent of variation between declared and allegedly excess finished goods when stock was determined on an average-weight basis. A discrepancy of about 25% was treated as too large to be explained by estimation methods, supporting a prima facie case of unaccounted stock and justifying confiscation and penalty at the stay stage. By contrast, variations below 5% were treated as marginal and capable of arising from the sampling method, so the allegation of non-accounted finished goods was not sustained for those appellants at the stay stage. Pre-deposit and recovery were therefore waived and stayed for three appellants, while partial deposit was required from the appellant with the larger excess.

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Issues: Whether pre-deposit of penalty and recovery should be waived in appeals arising from alleged excess stock of finished goods determined on average-weight basis.

Analysis: The claimed excess in one unit was about 25%, which was treated as too large to be explained by variation arising from estimation on an average-weight basis, so a prima facie case of unaccounted stock and justified confiscation and penalty was found for that unit. In the other three matters, the alleged excess was under 5%, and such marginal variation was considered possible when stock weight is ascertained by weighing sample ingots and applying an average. On that basis, the allegation of non-accounted finished goods was held to be unsustainable at the stay stage for those appellants.

Conclusion: Pre-deposit and recovery were waived and stayed for the three appellants with marginal variation, while the appellant with the larger apparent excess was directed to deposit a part of the penalty before the balance of pre-deposit was waived.

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