Remission of duty for molasses lost to natural deterioration was upheld; duty, penalty and interest were set aside.

Remission of duty was treated as admissible where excisable molasses deteriorated during prolonged storage and became unfit for consumption due to natural causes, including spontaneous combustion, rather than negligence. The text applies the settled principle that when goods are lost or destroyed by natural causes, duty is not payable and negligence does not arise as a bar to relief. On those facts, the refusal to grant remission under Rule 49(1) of the Central Excise Rules, 1944 was unsustainable, and the consequential duty demand, penalty and interest were set aside.

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Issues: Whether remission of duty was admissible on molasses that deteriorated and became unfit for consumption due to long storage and auto-combustion under Rule 49(1) of the Central Excise Rules, 1944, and whether the demand of duty, penalty and interest could be sustained.

Analysis: The disputed molasses had remained in storage because clearance depended on State permission, and the assessee had taken precautionary measures to preserve the tanks. The deterioration was found to have occurred because of natural causes and spontaneous combustion arising from prolonged storage, not due to negligence. The issue was treated as covered by settled law that where goods are lost or destroyed by natural causes, duty is not payable and the question of negligence does not arise. On the facts, the molasses had become unfit for consumption and the rejection of remission was therefore unsustainable.

Conclusion: Remission of duty was held admissible, and the duty demand, penalty and interest were set aside.

Final Conclusion: The appeal was allowed and the assessee obtained full relief against the impugned order.

Ratio Decidendi: Where excisable goods become unfit for consumption due to natural causes and not negligence, remission of duty cannot be refused under Rule 49(1) of the Central Excise Rules, 1944.

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