Remission of duty for handling loss may fall within Rule 21 where the loss is unavoidable during storage and handling.

Remission of duty under Rule 21 of the Central Excise Rules, 2002 is treated as available where handling loss is shown to be natural, unavoidable and insignificant. The Tribunal's earlier view was that the expression covering unavoidable accidents before removal is broad enough to include such handling losses, especially during handling and storage. On that reasoning, a remission claim could not be rejected merely because the loss was described as man-made or outside Rule 21. The note records that the rejection order was found unsustainable and set aside.

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Issues: Whether remission of duty was admissible under Rule 21 of the Central Excise Rules, 2002 in respect of handling loss claimed to be natural and unavoidable.

Analysis: The application for remission had been rejected on the view that handling loss was man-made and outside the scope of Rule 21. The Tribunal relied on its earlier view that the expression covering unavoidable accidents before removal is wide enough to include handling losses, particularly where the loss is insignificant and attributable to unavoidable loss during handling and storage.

Conclusion: Remission could not be denied on the ground that handling loss was per se outside Rule 21. The rejection order was unsustainable and was set aside.

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