Remission of duty for fire-destroyed goods defeats duty, interest and penalty demand founded solely on denial of remission.

Excise duty, interest and penalty could not be sustained on goods destroyed in fire where the demand rested entirely on denial of remission of duty. The record showed that remission for the fire-destroyed goods had already been allowed by the Tribunal and had attained finality. Once remission stood granted, the foundation for alleging contravention of excise provisions and recovering duty-related dues on those goods ceased to exist. The impugned demand was therefore unsustainable and was set aside in favour of the assessee, with consequential relief.

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Issues: Whether the demand of excise duty, interest and penalty on goods destroyed in fire could survive after the claim for remission of duty had already been allowed.

Analysis: The demand in the impugned order was founded entirely on the denial of remission of duty in respect of the fire-destroyed goods. The record showed that the claim for remission on account of fire had already been allowed by the Tribunal, and that decision had attained finality. Once remission stood granted, the basis for alleging contravention of the excise provisions and for recovering duty, interest and penalty on the destroyed goods ceased to exist.

Conclusion: The demand was unsustainable and the impugned order was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the assessee obtained consequential relief.

Ratio Decidendi: A demand for duty, interest and penalty cannot be sustained where it is founded solely on denial of remission, and remission in respect of fire-destroyed goods has already been allowed and attained finality.

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