Under section 63 of the Excise Act 1901 scales may be prescribed showing the quantity of excisable goods which shall be deemed to have been produced from a given quantity of material.

No scale has yet been prescribed for showing the quantity of tobacco which shall be deemed to have been produced from a given quantity of tobacco leaf but it is considered advisable to prescribe such a scale.

The following scale has been suggested:

From every 100 lbs of Leaf Tobacco actually put into operation there shall be required to be produced not less than 110 lbs of Plug Tobacco, or 106 lbs of Cut Tobacco, or 104 lbs Cigarettes, or 90 lbs Cigars.

As other ingredients (besides tobacco leaf) are used in the manufacture of tobacco the amount of manufactured tobacco is greater than the amount of tobacco leaf used in the manufacture.

Objection has been made to the scale on the ground that it is a physical impossibility to produce 110 lbs of manufactured goods from 100 lbs of material.

The matter has been referred to me for my opinion as to whether a scale can be prepared as before mentioned or whether mention should be made of the added ingredients.

In my opinion there is no legal reason why such a scale should not be made. Under the Act the word 'material' is defined as including all 'material used in the manufacture of excisable goods and declared by proclamation to be material within the meaning of this Act'. Tobacco leaf has I understand been proclaimed as material but the other ingredients used have not, I understand, been so proclaimed. There is no real absurdity in the weight of the manufactured article being in excess of the proclaimed material used in the manufacture. For instance water is largely used in the manufacture of excisable goods and a certain quantity might easily be absorbed so as to increase the weight of the finished article.

As to the verbiage, the following is preferable:

From every 100 lbs of Leaf Tobacco actually put into operation there shall be deemed to have been produced not less than 110 lbs of Plug Tobacco or . . .

[Vol. 5, p. 290]