Tolerance-limit breakage losses in glass bottles cannot sustain duty demand merely for absence of a timely remission application.

Duty on broken glass bottles lost during storage and handling was considered unsustainable where the breakage was recorded in monthly returns, verified from factory records, and fell within the Board-prescribed tolerance limit for aerated waters. The note states that a timely remission application was not the sole ining factor because the governing circular contemplated examination of breakages from records and permitted write-off up to 0.5%. The loss was treated as bona fide, consistent with the earlier view in the assessee's own matter, and the duty demand on the broken bottles was not sustained.

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Issues: Whether duty could be sustained on broken glass bottles lost during storage and handling merely because a formal remission application was not filed in time.

Analysis: The breakage of glass bottles was recorded in the monthly returns, and the departmental officers had examined the matter on the basis of the records. The Board circular governing breakages in aerated waters permitted write-off up to 0.5% and contemplated investigation from factory records, showing that prompt filing of a remission application was not the sole determining factor. The loss was found to be within the prescribed tolerance limit and the claim was treated as bona fide, following the earlier decision in the appellant's own case on the same issue.

Conclusion: The demand of duty on the broken glass bottles was not sustainable and the appeal was allowed in favour of the assessee.

Ratio Decidendi: Where breakage losses are within the Board-prescribed tolerance limit and are verifiable from the records, duty cannot be sustained merely for want of a timely remission application.

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