Molasses storage loss remission depends on proof of actual unavoidable loss; circular sets a guideline, not an automatic right.

A circular on molasses storage loss was treated as a guideline for the maximum loss that may be condoned, not as conferring an automatic right to remission merely because the alleged shortage fell within 2% of production. The assessee still had to prove on the facts that the loss actually occurred despite due precaution and could not have been avoided; the absence of proof of clandestine removal did not by itself establish condonable storage loss. The Tribunal's findings on shortage and the Dip Method Measurement were based on evidence and factual appreciation, so they did not raise any referable question of law. The reference application therefore failed.

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Issues: (i) Whether the Board's circular concerning storage loss in molasses entitled the applicant to automatic remission merely because the alleged shortage was within 2% of production; (ii) Whether the Tribunal's findings on shortage and the Dip Method Measurement gave rise to any question of law warranting reference.

Issue (i): Whether the Board's circular concerning storage loss in molasses entitled the applicant to automatic remission merely because the alleged shortage was within 2% of production.

Analysis: The circular was treated as laying down only a guideline as to the maximum storage loss that may be condoned. It did not create an absolute right to write off 2% of annual production in every case. The assessee remained bound to establish, on the facts and materials, that the loss actually occurred despite due precaution and could not have been avoided. The earlier finding that clandestine removal was not established did not by itself prove that the shortage was a condonable storage loss.

Conclusion: The claim to remission on the basis of the circular alone was not accepted and the issue was decided against the applicant.

Issue (ii): Whether the Tribunal's findings on shortage and the Dip Method Measurement gave rise to any question of law warranting reference.

Analysis: The Tribunal's view on the Dip Method was based on the fact that stock was measured repeatedly by the same method and even the applicant had used that method on the relevant date. The remaining questions were concluded by appreciation of circumstances and evidence, and did not disclose any legal issue for reference.

Conclusion: No referable question of law arose from the Tribunal's order, and the issue was decided against the applicant.

Final Conclusion: The application for reference failed because the controversy was resolved on factual findings and the circular did not confer an unconditional entitlement to remission.

Ratio Decidendi: A circular prescribing the maximum condonable storage loss does not grant an automatic right to remission; the assessee must still prove the actual, unavoidable loss on the facts of the case, and findings resting on evidence do not give rise to a question of law.

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