Molasses storage loss within the yearly wastage norm was correctly condoned under the applicable circular and statute.

Molasses storage loss in a sugar factory was treated as a continuous and unavoidable incident of operations, so it could not be assessed as if the loss occurred only before stock verification. The Tribunal upheld condonation of duty where the loss remained within the yearly 2% norm recognised by the Board's circular and reinforced by Section 8(4) of the U.P. Sheera Niyantran Adhiniyam, 1964. It rejected the Revenue's attempt to calculate loss on a daily or proportionate basis as misconceived and maintained that the yearly ceiling governs storage wastage, with additional loss excused where caused by accident or other unavoidable cause.

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Issues: Whether remission or condonation of duty on molasses storage loss was rightly upheld where the loss was within the yearly norm of 2% prescribed for storage wastage.

Analysis: The Tribunal held that storage loss of molasses is a continuous and unavoidable incident of sugar factory operations and cannot be treated as a loss occurring only on the last few days before stock verification. The Board's circular treated loss up to 2% of the quantity stored in a year as condonable, and the same approach was reinforced by Section 8(4) of the U.P. Sheera Niyantran Adhiniyam, 1964, which also recognises a yearly ceiling of 2% and exempts the occupier from penalty where excess loss is caused by accident or other unavoidable cause. The Revenue's attempt to compute the loss on a daily or proportionate basis was rejected as misconceived.

Conclusion: The condonation of duty on the molasses storage loss was upheld and the appeals were dismissed as lacking merit.

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