Discretionary remission of excise duty may be granted in part when goods are destroyed by fire, without express rule reference.

A taxing authority with power under Rule 147 of the Central Excise Rules to remit duty for unavoidable accident may grant remission in whole or in part. The absence of an express reference to the enabling rule does not, by itself, show non-application of mind if the order and surrounding circumstances disclose consideration of remission. Partial remission is not arbitrary merely because the goods were destroyed by fire; the authority may consider the licensee's undertaking, the nature of the premises, and related circumstances. In the absence of a legal right to full remission, writ interference is not warranted.

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Issues: (i) Whether the Collector failed to exercise his discretion under Rule 147 of the Central Excise Rules in granting only partial remission of duty on tobacco destroyed by fire. (ii) Whether the Collector's partial remission was arbitrary or unreasonable so as to warrant interference in writ jurisdiction.

Issue (i): Whether the Collector failed to exercise his discretion under Rule 147 of the Central Excise Rules in granting only partial remission of duty on tobacco destroyed by fire.

Analysis: Rule 160 made duty payable where excisable goods were lost or destroyed otherwise than as contemplated by the relevant rules, while Rule 147 empowered the Collector to remit duty in cases of unavoidable accident. The order did not expressly refer to Rule 147, but the grant of only half remission showed that the Collector necessarily acted under that provision. The absence of an express reference to the rule did not establish non-application of mind.

Conclusion: The Collector did exercise discretion under Rule 147 and did not fail to consider the question of remission.

Issue (ii): Whether the Collector's partial remission was arbitrary or unreasonable so as to warrant interference in writ jurisdiction.

Analysis: The discretion under Rule 147 was not absolute and had to be exercised reasonably, but it did not compel full remission merely because the fire was unavoidable. The Collector was entitled to consider the undertaking given at the time of licensing, the nature of the premises, and the surrounding circumstances. The grant of partial remission therefore disclosed an exercise of discretion that was neither arbitrary nor vitiated by irrelevant considerations. In the absence of a legal right to full remission, there was no ground for certiorari.

Conclusion: The partial remission was not shown to be arbitrary, unreasonable, or liable to be quashed.

Final Conclusion: The challenge to the excise authorities' orders failed because the Collector had validly exercised discretionary remission and the writ court found no basis to interfere.

Ratio Decidendi: Where a taxing authority has discretion to remit duty on goods destroyed by unavoidable accident, the authority may grant remission in whole or in part, and the absence of an express reference to the enabling rule does not by itself show non-exercise of discretion if the order and surrounding circumstances disclose application of mind.

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