Remission of duty for sugar lost during reprocessing cannot be denied where the loss is due to natural cause.

Rule 21 of the Central Excise Rules, 2002 allows remission where excisable goods are lost or destroyed by natural cause. In the context of sugar sent for reprocessing after becoming unmarketable, the Tribunal held that quantified loss occurring during reprocessing was covered by the rule and could not be denied remission merely because it arose in the course of reprocessing. The substantial quantity recovered had been cleared on payment of duty, and the remission claim for the balance loss was therefore admissible. The rejection of the remission application was held unsustainable.

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Issues: Whether remission of duty was admissible under Rule 21 of the Central Excise Rules, 2002 for sugar lost during reprocessing on the ground that the loss occurred due to natural cause.

Analysis: The appellant's sugar stock had become unmarketable and was taken for reprocessing, during which a quantified loss occurred. Rule 21 permits remission where goods are lost or destroyed by natural cause. The Tribunal noted that the loss of sugar in the reprocessing process was of the kind contemplated by the rule, and relied on the earlier view that such reprocessing loss could not be excluded from remission merely because it arose in the course of reprocessing. The Tribunal also observed that the substantial stock had been retrieved and duty had been paid on the quantity cleared.

Conclusion: Remission of duty was admissible, and the rejection of the remission application was not sustainable.

Final Conclusion: The assessee was entitled to remission for the sugar lost during reprocessing, and the impugned order was set aside.

Ratio Decidendi: Where excisable goods are lost in the course of reprocessing due to natural cause, remission under Rule 21 cannot be denied merely because the loss occurred during reprocessing.

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