Special stock taking need not be in writing; driage allowance in tobacco shortages remains a fact-based administrative assessment.

Rule 223A of the Central Excise Rules permits special stock taking when the Collector or competent officer considers it necessary or proper, and the direction need not be in writing; an oral order by the proper authority is legally sufficient. The challenge to the special stock taking was therefore rejected. On tobacco shortage, the permissible extent of driage depends on the nature and quality of the tobacco, storage conditions, season, and other facts. As no material was produced to show that the entire shortage was due to natural causes, acceptance of only 5 per cent driage was not interfered with, and the demand and penalty were sustained.

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Issues: (i) Whether a special stock taking under Rule 223A of the Central Excise Rules required a written order and prior recorded formation of opinion by the Collector. (ii) Whether the allowance of only 5 per cent driage in respect of the shortage of tobacco was arbitrary and liable to be interfered with.

Issue (i): Whether a special stock taking under Rule 223A of the Central Excise Rules required a written order and prior recorded formation of opinion by the Collector.

Analysis: Rule 223A permits special stock taking whenever the Collector deems it necessary or proper, in addition to the annual stock taking. The power could be delegated under Rule 5 of the Central Excise Rules, and the materials showed that the competent authority had directed the stock taking. The rule does not require the opinion or direction to be reduced to writing, and an oral direction by the proper officer is legally sufficient.

Conclusion: The contention that Rule 223A was not properly invoked was rejected.

Issue (ii): Whether the allowance of only 5 per cent driage in respect of the shortage of tobacco was arbitrary and liable to be interfered with.

Analysis: The extent of permissible driage depends on the nature and quality of the tobacco, the season, the place of storage, and other relevant facts. The authorities had considered the claim of loss by driage and evaporation and accepted only 5 per cent, while the petitioner produced no material to prove that the entire shortage of 49.4 per cent was due to natural causes. In the absence of such material, no interference with the factual determination was warranted.

Conclusion: The challenge to the driage allowance was rejected.

Final Conclusion: The writ petition failed on both grounds, and the impugned demand and penalty were sustained.

Ratio Decidendi: A special stock taking under Rule 223A can be validly directed without a written order, and the extent of driage allowed in tobacco stock cases is a matter of administrative assessment based on facts, not to be disturbed in the absence of supporting material.

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