Permissible variation in cement bag weight defeated excise duty demand where excess filling stayed within accepted limits.

Marginal excess filling of cement bags beyond the declared 50 kg weight did not justify central excise duty demand where the excess remained within the recognised permissible variation. The assessee filled about 50.200 kg per bag but charged only for 50 kg, and the record showed the extra quantity was intended to ensure customers received not less than the declared weight and to offset transit and handling loss. A CBEC circular accepted a 1% variation for cement bags, and the packaged commodities rules also contemplated such variation. On that basis, the excess was treated as permissible and no duty evasion was inferred; the demand was unsustainable.

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Issues: Whether a marginal excess filling of cement bags beyond the declared 50 kg weight, within the permissible variation, justified demand of central excise duty.

Analysis: The assessee packed about 50.200 kg cement in each bag but charged customers only for 50 kg. The record showed that a small excess was filled to ensure that the customer received not less than the declared weight and to account for transit and handling losses. The applicable CBEC circular recognised a 1% variation in bag weight for cement for excise purposes, and the relevant packaged commodities rules also contemplated such variation. Since the excess found was within the allowable limit, no duty evasion could be inferred.

Conclusion: The excess weight was permissible and the demand was unsustainable; the finding was against the Revenue and in favour of the assessee.

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