Remission for destroyed molasses accepted where spontaneous combustion was promptly reported and loss was departmental certified.

Molasses destroyed by spontaneous combustion was treated as a remission case, as the fire was immediately reported, departmental chemists examined samples, and the residue was certified unfit for human consumption. The Tribunal held that spontaneous combustion is a known and serious risk in molasses storage, and that the Central Excise Rules, 1944 did not prescribe any specific preventive procedure whose non-compliance would by itself justify duty demand. On those facts, the request for remission should have been considered in light of the loss and the departmental certification, so the duty demand was set aside.

---

---

Issues: Whether duty was payable on molasses destroyed by spontaneous combustion despite the assessee's request for remission, and whether alleged non-compliance with the prescribed procedure justified confirmation of the demand.

Analysis: The molasses stored in a pucca pit caught fire due to spontaneous combustion, the incident was immediately reported to the excise authorities, samples were examined by departmental chemists, and the burned molasses was certified unfit for human consumption. The demand was sustained by the lower authorities on the ground that the assessee had not followed the procedure under Rule 49 and Rule 147 of the Central Excise Rules, 1944 and had not taken adequate precautions. The Tribunal held that spontaneous combustion in molasses is a common and serious phenomenon, that the rules did not prescribe any specific procedure for preventing destruction of the goods, and that remission should have been considered in the light of the departmental certification and the circumstances of loss.

Conclusion: The duty demand was set aside and the assessee succeeded.

---