Remission for destroyed excisable goods bars a fresh duty demand where no mala fide intent to evade duty is shown.

Duty demand on molasses destroyed in a factory could not be sustained after remission had already been granted for the same quantity of goods. The prior remission order was treated as determinative of the duty consequence, so the remaining demand arising from the same loss was held unsustainable. Rule 21 of the Central Excise Rules was also read liberally where there was no evidence of mala fide intent to evade duty. On that basis, the duty demand failed.

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Issues: Whether the demand of duty on molasses destroyed in the factory could be sustained after remission of duty had already been allowed on the same goods.

Analysis: The earlier order granting remission on the very same quantity of molasses destroyed in the accident was taken as determinative of the duty consequence. Once remission was allowed for the destroyed goods, the remaining demand based on the same loss could not be upheld. The reasoning also proceeded on the principle that Rule 21 of the Central Excise Rules should receive a liberal construction where there was no evidence of mala fide intent to evade duty.

Conclusion: The demand was unsustainable and the appeal succeeded.

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