Reasoned adjudication required for remission denial after accidental loss of molasses; vague findings on preventive measures were unsustainable.

Rule 147 of the Central Excise Rules, 1944 allows remission where goods are lost or destroyed by unavoidable accident, while negligence can justify refusal. In a case involving loss of molasses by auto-combustion, denial of remission was held unsustainable because the adjudication order merely asserted that preventive measures were omitted without identifying what measures were required or confronting the assessee with any specific lapse. A remission refusal must disclose the material and reasons supporting the conclusion; otherwise it is not a reasoned adjudication and does not give an effective opportunity to respond. The order was set aside and the matter remitted for fresh consideration with proper notice and a speaking order.

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Issues: Whether denial of remission of central excise duty for loss of molasses by fire was sustainable when the adjudication order did not specify the preventive measures alleged to have been omitted and was therefore a non-speaking order.

Analysis: Rule 147 of the Central Excise Rules, 1944 permits remission where goods are lost or destroyed by unavoidable accident, while negligence may justify refusal of remission. The loss of molasses by auto-combustion was treated as an admitted fact, but the adjudication order rejected remission only on the broad assertion that preventive measures had not been taken, without identifying what measures were required or confronting the assessee with any specific omission. An order rejecting remission on such a basis must disclose the material and reasons on which the conclusion rests; otherwise it fails to meet the requirement of a reasoned adjudication and deprives the assessee of an effective opportunity to meet the case against it.

Conclusion: The denial of remission was unsustainable; the adjudication order was set aside and the matter was remitted for fresh consideration after issuing a proper notice and passing a speaking order.

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