Excise duty accrues on manufacture, and private records can prove duty evasion even without prior assessment or demand.

Excise duty on matches was treated as arising on completion of manufacture, because the taxable event under the Act is manufacture or production and not the later assessment or demand process; absence of formal assessment did not extinguish liability. The evidence from seized private accounts, statutory registers, and excise officers' testimony was found sufficient to show excess manufacture, unrecorded clearance, and evasion of duty beyond reasonable doubt. On that basis, contravention of the Rules was proved and the conviction under Section 9(1)(b) was sustained, with the acquittal set aside and the trial court's conviction and fine restored.

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Issues: (i) Whether excise duty liability on matches accrued only on assessment and demand by the excise authorities, or on completion of manufacture; and (ii) whether the evidence established evasion of duty and contravention of the statutory rules so as to sustain conviction under Section 9(1)(b) of the Act.

Issue (i): Whether excise duty liability on matches accrued only on assessment and demand by the excise authorities, or on completion of manufacture.

Analysis: Section 3 of the Act levies duty on excisable goods produced or manufactured in India, and the taxable event is manufacture or production. Rule 7 requires payment in the manner prescribed, while Rule 9 prohibits removal without payment of duty. The liability to duty therefore arises on completion of manufacture, even though the machinery for collection may operate through assessment and recovery procedures. The absence of an assessment or formal demand does not negate the statutory liability.

Conclusion: The contention that no offence could arise without assessment and demand was rejected.

Issue (ii): Whether the evidence established evasion of duty and contravention of the statutory rules so as to sustain conviction under Section 9(1)(b) of the Act.

Analysis: The contemporaneous seizure of private accounts, the explanation given by the accused, the comparison between the statutory register and the private records, and the testimony of the excise officers showed excess manufacture and clearance not reflected in the statutory books. The private records were treated as reliable, and the seizure was held to be lawful. The evidence established evasion of duty beyond reasonable doubt and showed contravention of the Rules.

Conclusion: The finding of acquittal was set aside and the respondents were held guilty under Section 9(1)(b) of the Act.

Final Conclusion: The conviction and fine imposed by the trial court were restored, and the appellate acquittal was reversed on the footing that excise duty attached upon manufacture and the prosecution had proved duty evasion from the records and testimony on record.

Ratio Decidendi: Excise duty becomes exigible on manufacture or production of the excisable goods, and proof from statutory and private records may sustain a conviction for evasion even in the absence of prior assessment or demand.

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