Remission for accidental loss of warehoused goods upheld where no negligence or clandestine removal was shown.

Warehoused excisable goods lost in an unavoidable accidental collapse and overflow were treated as eligible for remission under Rule 147 of the Central Excise Rules, 1944, because the assessee promptly informed the authorities and no clandestine removal or negligence was shown. On those facts, refusal of remission was unjustified and the duty demand under Rule 9(2) could not be sustained.

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Issues: Whether duty could be demanded on molasses lost in an accidental collapse and overflow from storage, and whether remission under the Central Excise Rules was warranted.

Analysis: The loss was found to have occurred due to an unavoidable accident and not due to clandestine removal or negligence. The assessee had intimated the excise authorities promptly and had taken all possible care to prevent the loss. Rule 147 of the Central Excise Rules, 1944 empowered remission where warehoused goods were lost or destroyed by unavoidable accident, and the exercise of that discretion had to be based on relevant facts. In the circumstances, the refusal to grant remission was not justified, and the demand confirmed under Rule 9(2) could not be sustained.

Conclusion: Duty was not payable on the accidental loss, and the order allowing remission was upheld in favour of the assessee.

Final Conclusion: The Revenue's challenge failed because the loss was treated as a genuine accidental loss falling within the scope of remission under the excise rules.

Ratio Decidendi: Where excisable goods are lost by an unavoidable accident, promptly reported to the authorities, and no clandestine removal or negligence is shown, remission of duty may be granted and a demand for duty cannot be sustained.

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