Permissible cement bag variation: 1% excess packing did not justify central excise duty on the additional quantity.

Cement bag packing was treated as permissible within the recognised 1% tolerance under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and the Board circular applied the same variation for central excise duty. Because no extra consideration was charged for the excess quantity and a binding circular could not be disregarded by the Revenue, duty on the alleged excess over 50 kg bags was not sustainable. Earlier decisions supporting around 1% variation in cement bags were also relied on, and the Revenue's appeal was rejected.

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Issues: Whether the 1% excess filling of cement bags of 50 kg was permissible under the Standards of Weights and Measures law and the Board circular, and whether central excise duty could be demanded on the excess quantity.

Analysis: The packing of cement bags is governed by the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, which permit variation within the prescribed tolerance. The Board's circular specifically allowed 1% variation, excess or short, for cement bags and directed that the same practice be followed for levy of central excise duty. The Revenue did not dispute the existence of the circular or the fact that no extra consideration had been charged from customers for any quantity beyond 50 kg. It is settled that the Revenue cannot contend against a binding Board circular. The Tribunal also noted that the issue had already been decided in earlier cases holding that around 1% variation in 50 kg cement bags is permissible and duty on such excess quantity cannot be sustained.

Conclusion: The 1% tolerance was permissible and the demand of duty on the alleged excess quantity was not sustainable; the Revenue's appeal was rejected.

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