Special stock taking under excise rules stands when Collector records satisfaction and no actual prejudice is shown in enquiry.

Special stock taking under Rule 223A of the Central Excise Rules was held valid because authorised officers reported shortages and abnormal features, and the Collector recorded the requisite satisfaction and directed the further stock taking. The challenge based on absence of a proper order therefore failed. Non-supply of the Inspectors' statements in the departmental enquiry did not vitiate the proceedings because no material prejudice was shown: the weighment sheets were signed by the petitioner, no contemporaneous protest was made, and the Inspectors were produced for cross-examination, which was availed of. The writ petition was rejected as no breach of natural justice affecting the enquiry was established.

---

---

Issues: (i) Whether the special stock taking of the excisable goods was invalid for want of a proper order or satisfaction of the Collector under Rule 223A of the Central Excise Rules, 1944; (ii) Whether non-supply of the statements of the Inspectors in the departmental enquiry vitiated the proceedings for breach of natural justice.

Issue (i): Whether the special stock taking of the excisable goods was invalid for want of a proper order or satisfaction of the Collector under Rule 223A of the Central Excise Rules, 1944.

Analysis: The inspection began as a surprise inspection by authorised officers under Rule 197 of the Central Excise Rules, 1944. On noticing shortages and abnormal features, they reported the matter to the Collector, who recorded an order directing special stock taking. The record thus showed that the Collector had formed the requisite satisfaction contemplated by Rule 223A and that the further stock taking was conducted pursuant to his direction.

Conclusion: The special stock taking was valid and the contention challenging it failed.

Issue (ii): Whether non-supply of the statements of the Inspectors in the departmental enquiry vitiated the proceedings for breach of natural justice.

Analysis: The petitioner was unable to show prejudice from the refusal to furnish the statements. The weighment sheets prepared during the inspection were signed by the petitioner, and he did not protest at that stage. The Inspectors whose statements were sought were also made available for cross-examination, which the petitioner availed of. In these circumstances, the non-supply of the statements did not cause any material prejudice so as to invalidate the enquiry.

Conclusion: The proceedings were not vitiated by breach of natural justice on this ground.

Final Conclusion: The writ petition was rejected because the impugned stock-taking proceedings were lawful and no prejudicial denial of natural justice was established.

Ratio Decidendi: A special stock taking under Rule 223A is valid when the Collector records the requisite satisfaction on the basis of a proper report from authorised officers, and a procedural lapse in supplying materials does not vitiate the enquiry unless actual prejudice is shown.

---