Remission of excise duty for warehouse fire requires proof of unavoidable accident and due care; duty demand remained enforceable.

Excise duty on warehoused tobacco remained chargeable under section 3, and liability attached while the goods were stored, though payment fell due at the stage fixed by the rules. Rule 147 gave the Collector only a discretionary power to remit duty where warehoused goods were lost or destroyed by unavoidable accident. The applicant seeking remission had to prove both unavoidable accident and reasonable care and precaution. On the facts, the petitioner failed to establish either requirement, so no basis existed for remission and the duty demand was enforceable.

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Issues: Whether the petitioner was entitled to remission of excise duty on tobacco destroyed in a warehouse fire under rule 147, and whether the demand for duty could therefore be enforced.

Analysis: Under section 3 of the Central Excise and Salt Act, excise duty was chargeable on excisable goods, and under the relevant rules the liability attached when the goods were stored in the warehouse, though payment became due at the stage prescribed by the rules. Rule 147 conferred only a discretionary power on the Collector to remit duty where warehoused goods were lost or destroyed by unavoidable accident. The burden of showing both unavoidable accident and the exercise of reasonable care and precaution lay on the applicant for remission. On the facts, the petitioner failed to establish that the loss was caused by an unavoidable accident or that reasonable precautions had been taken. No sufficient case was made out for invoking the Collector's remission power.

Conclusion: The petitioner was not entitled to remission under rule 147, and the demand of duty was validly enforceable. The decision is against the assessee.

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