Remission of duty for accidental molasses loss allowed where tank rupture was not deliberate and no mala fide conduct was shown.

Remission of duty was held admissible under Rule 21 for loss of molasses where the storage tank nipple ruptured and the loss was undisputedly accidental. The deciding factor was that the rupture arose from leakage in an old storage tank, the loss was immediately reported, and there was no deliberate act or mala fide conduct by the assessee. The rule on remission was applied to accidental destruction or loss not caused intentionally, and duty remission was therefore allowed.

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Issues: Whether remission of duty was admissible under Rule 21 of the CENVAT Credit Rules, 2004 for the loss of molasses caused by rupture of the storage tank nipple.

Analysis: The loss of molasses was undisputed and was caused by bursting of the drain nipple of the storage tank. The decisive question was whether the accident was deliberate or attributable to mala fide conduct so as to deny remission. The facts showed that the rupture occurred due to leakage from the old storage tank and the loss was immediately reported to the department. The rule governing remission cannot be construed so narrowly as to make it ineffective in cases of accidental destruction or loss not brought about intentionally by the assessee.

Conclusion: Remission of duty was admissible, as the loss was accidental and there was no deliberate act or mala fide on the part of the assessee.

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