Fire loss remission under central excise rules upheld where records supported destruction and no evidence showed clandestine removal.

Remission of central excise duty was treated as available for knitted fabrics destroyed in a fire where statutory records, immediate loss assessment, and the double-lock storage arrangement supported the claimed quantity. In the absence of evidence of clandestine removal or proof that the disputed balance quantity was still available, the Revenue's lower survey estimate could not displace the assessee's records. Rule 49(1) of the Central Excise Rules, 1944 was applied to deny recovery of duty on the alleged balance quantity, making the demand unsustainable.

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Issues: Whether remission of central excise duty on the quantity of knitted fabrics destroyed in fire was rightly granted and whether duty could be demanded on the balance quantity alleged by the Revenue.

Analysis: The quantity of goods in the godown was supported by the assessee's statutory records and the immediate fire-loss assessment. The adjudicating authority accepted that there was no evidence of clandestine removal and that the goods were kept under a double lock scheme, making unexplained disappearance of the disputed quantity improbable. In the absence of contrary evidence showing that the balance quantity was removed or was otherwise available, the surveyor's lower estimate could not override the statutory records for the purpose of denying remission. Rule 49(1) of the Central Excise Rules, 1944 was applied to hold that duty was not recoverable on the disputed balance quantity.

Conclusion: Remission was rightly allowed for the goods totally lost in fire, and the demand on the balance quantity was not sustainable.

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