Capacity-based duty regime defeats inference of suppression where no material rebuts the factual findings on shortages and excesses.

Under a capacity-based duty regime, payment of duty on fixed annual production capacity can negate any inference of suppression or clandestine removal from alleged shortages and excesses. The Tribunal accepted the Commissioner's finding that, on the facts, the respondents' duty liability was governed by the fixed capacity basis and that no material had been produced to rebut the conclusion that no evasion was shown. The Revenue failed to establish that the factual findings were unsustainable, and the order in favour of the respondents was sustained.

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Issues: Whether the Revenue was justified in challenging the finding that, where duty is paid on the basis of fixed annual production capacity, the alleged shortages and excesses did not justify an inference of suppression or clandestine removal.

Analysis: The respondents were paying duty on the fixed annual production capacity under the applicable capacity-based regime. On that footing, the Tribunal accepted the Commissioner's view that there was no reason to presume suppression of production or removal of goods without payment of duty. The Revenue did not advance any material to rebut these findings or to show that the Commissioner's conclusions were unsustainable.

Conclusion: The Revenue's challenge failed, and the order in favour of the respondents was sustained.

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