Court allows duty remission for lost alcohol due to evaporation without immediate notification

The appeal was successful as the court set aside the impugned order denying duty remission on Denatured Ethyl Alcohol lost due to evaporation. The court found that immediate notification of loss within 48 hours was not required for gradual losses like evaporation, as mandated only for sudden causes such as fire. The appellants had consistently reported the loss within prescribed limits through RT 12 returns, justifying their entitlement to duty remission. As a result, the appeal was allowed, and appropriate relief was granted in accordance with the law.

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Issues:
Remission of duty on Denatured Ethyl Alcohol lost due to evaporation.

Analysis:
The appeal pertains to the remission of duty amounting to Rs. 1,08,070.10 on Denatured Ethyl Alcohol lost during the disputed period due to evaporation. The appellants, engaged in Sugar, Molasses, and Ethyl Alcohol manufacturing, experienced a natural loss of Denatured Ethyl Alcohol stored by them. This loss was reported to the Department through RT 12 returns, within the prescribed limits and not in excess. The denial of duty remission was based on the failure to notify the loss within 48 hours as required by the Basic Excise Manual. However, it was argued that such immediate intimation is mandated only in cases of destruction due to fire or other sudden causes, not for gradual losses like evaporation. The appellants consistently reported the loss in their returns during the disputed period, justifying their entitlement to duty remission within the permissible limits. Consequently, the impugned order was set aside, and the appeal was allowed with appropriate relief in accordance with the law.

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