Excise duty remission for storage losses sustained where natural causes, unavoidable accident, and no clandestine removal were found.

Rule 21 remission of excise duty applies where goods are shown to have been lost or destroyed by natural causes or unavoidable accident, and that expression must be construed reasonably in the context of commercial storage and handling. On the facts recorded by the Tribunal, the losses in open storage and during handling were found reasonable, with no tangible evidence of clandestine removal; that factual satisfaction supported remission. The reference to accounting policy did not displace the finding that the statutory conditions for remission were met, so the Revenue's challenge failed.

---

---

Issues: Whether remission of excise duty under Rule 21 of the Central Excise Rules, 2001 was rightly allowed on the ground that the loss of stored goods was attributable to natural causes or unavoidable accident.

Analysis: Rule 21 permits remission where goods are shown to the satisfaction of the Commissioner to have been lost or destroyed by natural causes or by unavoidable accident, or to be unfit for consumption or marketing before removal. In the context of commercial storage and handling of large quantities of concentrates, the expressions "natural causes" and "unavoidable accident" require a reasonable and practical construction so that the remission provision is not rendered ineffective. The Tribunal recorded a factual satisfaction that the losses were reasonable, occurred in open storage and during handling, and that there was no tangible evidence of clandestine removal. The mere reference to accounting policy did not vitiate that factual finding.

Conclusion: The remission granted by the Tribunal was upheld and the challenge by the Revenue failed.

---