Remission of duty for accidental loss of molasses upheld where fire, no negligence, and unusable goods were proven.

Remission of duty was available for molasses lost in store by auto-combustion because the loss was treated as an unavoidable accident, the assessee had promptly informed the authorities, and no negligence was shown. The evidence also established that the burnt molasses had been removed as cinder and that test reports confirmed the goods were unfit for consumption. On those facts, the conditions for remission under Rule 21 of the Central Excise Rules, 2002 were satisfied, and the duty demand could not be sustained. The key principle is that remission is admissible where excisable goods are lost accidentally, the assessee is not at fault, and the goods are proven to have become unusable.

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Issues: Whether remission of duty was admissible on molasses lost in store due to auto-combustion and whether the appellant was entitled to consequential relief.

Analysis: The loss was found to have occurred due to an unavoidable accident. The record showed prompt intimation to the authorities, efforts to mitigate the loss, and no negligence on the part of the appellant. The burnt molasses were removed as cinder and the uncontroverted test reports showed that the goods were no longer fit for consumption. On these facts, the requirements for remission under Rule 21 of the Central Excise Rules, 2002 were satisfied.

Conclusion: The appellant was entitled to remission of duty under Rule 21, and the impugned demand could not survive.

Ratio Decidendi: Remission under Rule 21 is allowable where excisable goods are lost in an unavoidable accident, the assessee is not negligent, and the goods are shown by evidence to have become unfit for consumption.

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