Packing-machine compounded levy turns on operational use, with inspection evidence and electricity records supporting duty liability.

The packing-machine based compounded levy scheme fixes duty liability by reference to the number of operational machines, not the actual quantity manufactured. In the stated facts, the machine was found running during inspection, with tobacco being packed and labour present, as recorded in the panchnama. The claim that sealing prevented operation was not supported by contemporaneous panchnamas or any timely objection before the visiting officers, and electricity consumption was consistent with regular use. On that basis, the machine was treated as operational and duty was considered payable for the relevant period.

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Issues: Whether the packing machine in the appellant's factory was operational on the relevant date and, if so, whether duty was chargeable under the packing-machine based compounded levy regime for the relevant period.

Analysis: The machine was found at the time of inspection to be in running condition, with tobacco being packed and labourers at work, as recorded in the panchnama. The claim that the machine had been sealed at several points and therefore could not have functioned was not supported by the contemporaneous panchnamas or any timely objection before the visiting officers. The consistent electricity consumption also supported regular use of the machine. Under the applicable packing-machine based duty scheme, liability is determined by the number of operational machines and not by the actual quantity manufactured.

Conclusion: The packing machine was held to be operational, and duty was rightly demanded for the relevant period; the challenge failed.

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