Unaccounted scrap demand fails where duty is based on -like weight assumptions without proof of clandestine removal.

Excise duty demand for alleged unaccounted scrap cannot be sustained on conjectural computation alone. Where the demand was built on an assumed average weight from containers and the record did not show clandestine removal or suppression, the absence of supporting evidence was fatal. The assessee's explanation that cutting and trimming scrap was accounted for, sales were reflected, and balance credit remained in stock further undermined the demand. On that basis, the duty demand and penalty were set aside.

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Issues: Whether duty demand and penalty could be sustained on alleged unaccounted scrap merely on the basis of assumed average weight of containers, without evidence of removal of scrap without payment of duty.

Analysis: The demand was founded on the quantity of scrap allegedly not entered in the statutory records, computed by adopting an average weight from 100 containers and by relying on the range of weights mentioned in the order. The record also showed the appellant's explanation that cutting and trimming scrap was accounted for, that scrap sales were reflected, and that balance credit remained in stock. No material was shown to establish that scrap had been removed from the factory without duty payment. A demand under the excise law cannot rest on assumptions alone in the absence of supporting evidence of clandestine removal or suppression.

Conclusion: The duty demand and penalty were not sustainable and are set aside in favour of the assessee.

Final Conclusion: The appeal succeeds because the impugned demand was based on weight and lacked evidentiary support for unaccounted removal of scrap.

Ratio Decidendi: Excise duty demand for alleged unaccounted removals cannot be sustained on conjectural computation alone and must be supported by evidence showing actual clandestine clearance or non-payment of duty.

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