Remission of duty for riot-damaged excisable goods upheld; penalty falls when goods are unfit for marketing.

Remission of duty was admissible where excisable goods were damaged in a riot and became unfit for marketing, as the applicable rules covered goods unfit for consumption or marketing and also provided relief for loss or destruction by unavoidable accident. On the record, including the jurisdictional report and the adjudicating authority's own findings, the goods were shown to be damaged and unfit for sale, and denial of remission was unsustainable. As the duty demand lacked foundation, the penalty for alleged procedural contravention under the excise rules also could not be sustained.

---

---

Issues: Whether remission of duty was admissible on excisable goods damaged in a riot and rendered unfit for marketing, and whether penalty was sustainable for alleged procedural contravention.

Analysis: The relevant rules permitted non-demand of duty on goods claimed to be unfit for consumption or marketing, and also contemplated relief where goods were lost or destroyed by unavoidable accident. The record, including the jurisdictional report and the adjudicating authority's own findings, showed that the goods had become damaged and unfit for marketing. The absence of an expressly shown procedure requiring immediate intimation, coupled with the absence of a reasonable basis for blaming the assessee for not safeguarding the goods beyond what was already done in the disturbed circumstances, made denial of remission unsustainable. Since the foundation for the duty demand failed, the penalty imposed for alleged contravention of the excise rules also could not stand.

Conclusion: Remission of duty was allowed and the penalty was set aside.

---