Cotton yarn shortage based on own records upheld; unsupported weighing-scale and tolerance pleas failed.

Shortage of cotton yarn was treated as established from the assessee's own records, and the duty demand with penalty was sustained. The pleas that the weighing scale was defective, the tare weight was non-uniform, and manufacturing tolerance should offset the variance were rejected because no substantive evidence showed any continuing defect or quantified error. The stated tolerance in cotton yarn manufacture was held to be relevant only for assessing yarn count, not a basis for reading the shortage in the assessee's favour. The tribunal further noted that any production error would average out over time and could not negate the shortage recorded.

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Issues: Whether the duty demand and penalty could be sustained where shortage of cotton yarn was found on the basis of the assessee's records, and whether the plea of defective weighing scale, non-uniform tare weight, and manufacturing tolerance could rebut the finding of shortage.

Analysis: The shortage was found established from the assessee's own records. The pleas regarding defect in the weighing scale and non-uniform tare weight were rejected because no substantive evidence was produced to show any continuing defect or to quantify the alleged error. The claimed tolerance in the manufacture of cotton yarn was held to be a margin for assessment of yarn count and not a basis for assuming that the variance must be read in favour of the assessee. The error in production was held to average out over time and could not negate the shortage found on record.

Conclusion: The challenge to the duty demand and penalty failed, and the appeal was dismissed.

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