Remission of duty for accidental loss of warehoused goods during transit is available when loss is beyond the assessee's control.

Goods lost in an unavoidable accident during bond-to-bond transfer of warehoused goods were treated as loss before clearance for home consumption, so remission or refund of duty was available under the Customs Act. The conditions attached to removal under permission were read as requiring reasonable precautions for safe transit, not absolute liability for every loss. The undertaking to bear transfer losses was confined to preventable losses and did not bar relief where the loss occurred without negligence, collusion, or lack of reasonable care. The accident-related spill therefore fell within Section 23(1), and the duty burden was remittable or refundable.

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Issues: Whether duty paid on goods lost in an unavoidable accident during bond-to-bond transfer of warehoused goods was refundable or remittable under the Customs Act, 1962, notwithstanding the undertaking to bear transfer losses.

Analysis: The goods remained warehoused and were moved under permission granted under Section 67 of the Customs Act, 1962, subject to conditions for due arrival at the destination warehouse. Those conditions were held to require reasonable precautions for safe transit, not absolute liability for every loss. The undertaking to bear transfer losses was construed as covering preventable losses, not loss caused by natural causes or an unavoidable accident beyond the control of the assessee. As no negligence, collusion, or lack of reasonable care was established, the spill resulting from the accident was treated as loss of warehoused goods before clearance for home consumption, attracting Section 23(1) of the Customs Act, 1962.

Conclusion: The assessee was entitled to relief by way of remission or refund of duty on the goods lost in the accident, and the bar based on the undertaking did not apply.

Ratio Decidendi: Loss of warehoused goods caused by an unavoidable accident during transit under Section 67 of the Customs Act, 1962 is covered by Section 23(1), and an undertaking to bear transfer losses does not exclude remission where the loss is beyond the assessee's control.

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