Formula-based production estimates cannot justify pre-deposit where clandestine removal is not prima facie proved.

Pre-deposit of duty and penalty may be waived where the demand rests only on a formula-based estimate of production and the department has not produced prima facie evidence of clandestine removal. A mere shortage computed from a guideline linking concentrate input to output, without corroboration of suppression, removals, or other supporting material, does not by itself justify insisting on deposit. On that footing, no prima facie case for penalty was shown, and recovery was stayed.

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Issues: Whether pre-deposit of duty and penalty should be dispensed with and recovery stayed where the demand was founded only on a formula-based estimate of production and there was, prima facie, no evidence of clandestine removal.

Analysis: The demand was based on the assumption that production of sweetened aerated water must strictly correspond to the formula relating concentrate input to output. The order noted that this approach rested on presumption rather than proof and that clandestine removal must be established by the department. A mere shortage calculated from a guideline formula, without supporting evidence of suppression, removals, or other corroborative material, did not furnish a prima facie basis for insisting on deposit. The order also recorded that no prima facie case for penalty had been shown.

Conclusion: Pre-deposit of duty and penalty was waived and recovery was stayed.

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