Remission of excise duty on deteriorated molasses may survive despite later circulars and protest payment.

Remission of central excise duty and refund of duty paid under protest are discussed in the context of molasses stored in a pucca pit, where the goods deteriorated, became unfit for marketing, and were later destroyed under official supervision. The analysis states that a later circular withdrawing an earlier storage permission did not justify denial of relief on these facts, particularly where the duty had been deposited under protest. The operative point is that deterioration during lawful storage and destruction with authority support can sustain remission and consequential refund.

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Issues: Whether remission of central excise duty and refund of duty paid under protest were admissible in respect of molasses stored in pucca pit that deteriorated in quality, became unfit for marketing, and was later destroyed after permission from the authorities.

Analysis: The operative circular of 1988 had withdrawn the earlier 1982 circular that permitted storage in kutcha pit on bond, but the facts showed that the molasses remained in pucca pit, deteriorated during storage, and was found unfit for marketing before the attempt to shift or destroy it. The goods were ultimately destroyed under the supervision of the State Excise Authority and the duty had been paid under protest. On these facts, and following the reasoning adopted in the cited tribunal decision on materially similar facts, the assessee was not to be denied remission merely because the department relied on the later circular or because the duty had already been deposited under protest.

Conclusion: Remission of duty and consequential refund were admissible in favour of the assessee.

Final Conclusion: The appellant was entitled to relief on the basis that the excisable goods had deteriorated in storage, become unfit for marketing, and were destroyed under official supervision, so the duty already paid under protest could not be retained.

Ratio Decidendi: Where excisable goods deteriorate during lawful storage, become unfit for marketing, and are destroyed under official supervision, remission of duty cannot be denied merely because the duty had been paid under protest or because a later circular restricts future storage arrangements.

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