Combined stock verification of molasses was required, so a shortage finding based on one storage point failed.

A duty demand based on alleged shortage of molasses was unsustainable because the stock recorded in the RG 1 register represented a combined balance across the steel tank and the katcha pits. Shortage or excess could be determined only by verifying all storage locations together, and the departmental check was flawed because it examined only the steel tank while omitting the other storage places. As the alleged shortage lacked a reliable factual basis, the consequential allegation of duty loss also failed.

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Issues: Whether the demand of duty based on shortage of molasses was sustainable when stock verification was confined to one storage point and the balance in the other storage places was not verified.

Analysis: The stock shown in the RG 1 register was a combined balance for the steel tank and the katcha pits. In such a situation, any shortage or excess could be correctly determined only after taking stock of all storage places together. The verification method adopted by the department was flawed because it concentrated only on the steel tank and omitted the other storage places. On that basis, the alleged shortage had no reliable foundation and the consequential allegation of loss of duty also failed.

Conclusion: The duty demand was not sustainable and the allegations of shortage failed.

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