Premature duty demand barred until remission request is finally rejected under Central Excise law.

A duty demand under the Central Excise framework cannot be issued before the remission application arising from a factory fire is finally decided. Liability to pay duty arises only after the remission request is considered and rejected; until then, the notice of demand is premature because it assumes remission is unavailable. The timing of demand follows Rule 49(1) of the Central Excise Rules, 1944, read with Rule 9A(5) and Section 11A(3)(ii)(c) of the Central Excise Act, 1944. The operative effect is that assessment and recovery action must await final rejection of remission.

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Issues: Whether a duty demand could be raised before the final decision on the remission application arising out of the fire incident in the factory.

Analysis: Under Rule 49(1) of the Central Excise Rules, 1944, the liability to demand duty would arise only after the remission request is considered and final orders are passed. The time for issuing a notice of demand would begin when duty becomes payable after rejection of remission, and this was linked to Rule 9A(5) of the Central Excise Rules, 1944 read with Section 11A(3)(ii)(c) of the Central Excise Act, 1944. A notice issued earlier would proceed on an assumption that remission was unavailable, and duty demands cannot be founded on such presumptions.

Conclusion: The duty demand could not be raised before final rejection of the remission request, and the Revenue's challenge failed.

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