Warehouse shortage and normal driage: factual explanation must cover the full deficiency; absence of fixed percentage does not invalidate the rule.

Where excisable goods are found short in warehouse stock, the warehouse keeper must satisfy the proper officer that the entire deficiency is due to normal natural causes and allowable driage. The absence of a fixed percentage for permissible shortage does not by itself make Rule 223A arbitrary or ultra vires, because the rule operates as a method of proof and leaves factual assessment to the officer on the explanation offered. On the stated facts, only part of the shortage was accepted as normal driage and the balance remained liable to duty; the challenge to the levy and the rule failed.

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Issues: Whether the shortage of excisable goods in the warehouse was wholly explainable as normal driage due to natural causes, and whether Rule 223A of the Central Excise Rules was ultra vires for conferring arbitrary power on the proper officer.

Analysis: Once shortage in stock is found, the warehouse keeper must explain the circumstances of the deficiency and satisfy the proper officer that the entire shortage was normal and allowable. The proper officer had accepted that there was no clinching evidence of clandestine removal under Rule 151, but held that only part of the deficiency could be treated as normal driage and the balance remained liable to duty. The rule was not held to confer arbitrary power merely because no fixed percentage of permissible shortage was prescribed, since the rule operates as a method of proof and permits the officer to assess whether the explanation for deficiency is acceptable on the facts of each case.

Conclusion: The challenge to the levy and to Rule 223A failed. The shortage beyond the permitted driage was rightly subjected to duty, and the rule was upheld.

Ratio Decidendi: Where excisable goods are found deficient in stock, the person in charge must establish to the satisfaction of the proper officer that the entire shortage is attributable to normal natural causes; absence of a fixed standard does not by itself render the rule conferring such assessment power arbitrary or ultra vires.

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