J.R. MUDHOLKAR, J.

(1) THIS is an appeal by special leave from the Order of the government of India, Ministry of Finance (Department of Revenue), rejecting the appellants application preferred under S. 36 of the central Excises and Salt Act, 1944 (1 of 1944).

(2) THE appellant is a public limited company and has been carrying on the business inter alia of manufacturing sugar from sugarcane since the year 1933 at its factory-situated at Hargaon in the State of Uttar Pradesh. In May, 1957 an Assistant Chemical Examiner inspected the factory and made a report to the government to the effect that the appellant had not, kept correct accounts of the amount of mixed juice which went into the production of sugar, as required by Rule 83 of the rules framed under the Act taken along with the Form R.G 6 (c) prescribed by the aforesaid rule. The report also stated that for the period between the commencement of the crushing season and 7/05/1957, 11,606 maunds of sugar have been short accounted for. On the basis of this report a show cause notice was issued to the appellant and after hearing its representative the Collector of central Excise, Allahabad, passed an order on 19/02/1958, requiring the appellant to pay duty on 11,606 maunds of sugar at the rate of Rs. 5-10-0 per cwt. In addition, he imposed a penalty of Rs. 2,000.00 on the appellant for not maintaining the accounts correctly and in the manner prescribed by rule 83 read with rule 226 of the central Excise Rules, 1944. Against this order, the appellant preferred an appeal before the central Board of Revenue under S. 35 of the Act and asked for a personal hearing. After granting it and hearing the appellants representation the Board dismiss- ed the appeal. It then preferred an application for Revision before the central Government under S. 36. This application was dismissed on 17/11/1959. After that the appellant sought special leave to appeal from this Court under Art. 136 of the Constitution which having been granted, the appeal has come up before us.

(3) WHAT is urged on behalf of the appellant in the appeal is that the Order of the Collector holding that 11,606 maunds of sugar were short accounted for and that the accounts had not been properly kept was based on assumptions for which there was no basis. In order to appreciate the point it is necessary to bear in mind, the process of manufacturing sugar employed in the factory. This has been set out in the petition for special leave as well as the statement of the case and it is not contended on behalf of the respon- dent that there is any error in what the appellant has stated in this behalf. The process, in so far as it is material for the purposes of this case is as follows:-

SUGARCANE received at the factory is weighed mechanically cut into pieces and fed into the mills called "crusher and mills" where it is crushed.

DURING this process, a certain quantity of water as introduced. The mixture of cane guice and water obtained from the crushing operation is called mixed juice.

THE mixed juice is led from the crusher and mills to two tanks placed over weighbridges.

THE two tanks are attached to weighbridges with lever arrangement which have markings on their beams. The persons incharge of the operation adjust each beam at a certain mark. A movable indicator is also fitted on to the tanks which begins to move up as more and more juice finds its way in the tank. When that indicator comes up to the fixed mark on the beam, the persons in-charge of the operation immediately stop the further in flow of mixed juice. The gross Weight of the tank with its content of mixed juice when the fixed mark is reached is 7.5 tons. The tare weight of the tank being known, the actual weight of mixed juice is ascertained by deducting the tare weight from 7.5 tons.

THE mixed juice is then introduced into the manufacturing process where it is clarified, the water is evaporated and, eventually, sugar