Test report from one stock sample could not justify duty demand on later clearances; demand confined to existing stock.

A test report drawn from stock on 14-8-1974 was not accepted as a valid basis for extending duty demand to clearances made later, because samples were not drawn at regular intervals and the interval between draws varied. The demand was therefore not sustained for goods manufactured and cleared between 14-8-1974 and 14-10-1974. It was confined only to the stock of 500 kgs. actually available on 14-8-1974.

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Issues: Whether the test report of a sample drawn from stock on 14-8-1974 could be applied to clearances made thereafter and whether the duty demand could be sustained only in respect of the stock actually lying on that date.

Analysis: The order noted that samples were not drawn at regular intervals and that the interval between draws varied. In these circumstances, the test result obtained from the sample drawn from the stock of 500 kgs. on 14-8-1974 was not treated as a valid basis for extending the demand to goods manufactured and cleared over the subsequent period up to 14-10-1974.

Conclusion: The demand was set aside for the clearances made between 14-8-1974 and 14-10-1974, and it was confined only to the stock of 500 kgs. available on 14-8-1974.

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