Estimated stock quantification does not by itself justify confiscation of alleged excess goods

Excess stock of sponge iron found in silo, bags and loose form was quantified through dip reading, average bag weight and estimation of loose stock. On that basis, confiscation was not sustained merely because the alleged excess was computed by estimation, and the confiscation was set aside. The note states that where excess stock is determined on an estimated basis, that computation alone is insufficient to justify confiscation, and the assessee's relief was maintained.

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Issues: Whether confiscation of the excess sponge iron found in the factory was sustainable when the quantity was determined on estimation basis.

Analysis: The stock of sponge iron was found in different forms, namely in silo, in bags and in loose form in a shed. The quantity was worked out through dip reading, average bag weight and estimation for the loose stock. Since the total quantity was arrived at on estimation basis, the basis for treating the excess as liable for confiscation was not found infirm.

Conclusion: Confiscation of the excess goods was rightly set aside.

Final Conclusion: The appeal against the setting aside of confiscation failed and the order in favour of the assessee was sustained.

Ratio Decidendi: Where the alleged excess stock is quantified on estimation basis, confiscation cannot be sustained merely on that estimated computation.

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