Remission of duty for deteriorated excisable goods prevails over circular and bond conditions when goods become unfit during storage.

Remission of duty was treated as available for molasses that deteriorated in storage and became unfit for consumption, where the loss occurred for reasons beyond the assessee's control and there was no unauthorized removal. The statutory remission scheme under the Central Excise Rules was held to prevail over a Board circular and bond condition requiring duty payment on loss or damage. Consistent remission on substantially similar facts for other seasons also supported the conclusion that disallowance for the disputed years was unsustainable. Remission was therefore allowed and the duty disallowance was set aside.

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Issues: Whether remission of duty was allowable on molasses that had deteriorated and become unfit for consumption during storage, notwithstanding a Board circular and bond condition requiring payment of duty on loss or damage.

Analysis: The order recorded that the goods had deteriorated and were ultimately destroyed, and there was no allegation of unauthorized removal. It further accepted that the statutory scheme provided for remission where excisable goods become unfit for consumption due to reasons beyond the control of the assessee. The Board circular and bond condition could not prevail over the statutory entitlement under the Central Excise Rules. Since remission had been allowed for other seasons on substantially similar facts, disallowance for the disputed years was found to be inconsistent and unsustainable.

Conclusion: Remission of duty was held allowable, and the disallowance for the seasons 1982-83 and 1983-84 was set aside in favour of the assessee.

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