Remission for fire-damaged sugar: duty could not be demanded where the stock was unfit for marketing and no culpable negligence was proved.

Duty was not sustainable on sugar destroyed in a fire where the remaining stock was shown to be damaged and unfit for human consumption or marketing. The proviso to Rule 49(1) of the Central Excise Rules, 1944 empowered the proper officer to forgo duty on goods claimed by the manufacturer as unfit for marketing, subject to the stated conditions. On the facts recorded, the evidence did not establish culpable negligence sufficient to deny remission. As the duty demand itself could not stand, the penalty also could not survive.

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Issues: Whether duty could be demanded and penalty imposed on sugar destroyed in a fire accident when the goods were claimed to be unfit for marketing.

Analysis: The fire caused extensive damage to stored sugar, and the remaining loss was accounted for as damaged V.P. Sugar. The evidence on record did not establish a definite finding of culpable negligence sufficient to deny relief. The proviso to Rule 49(1) of the Central Excise Rules, 1944 empowered the proper officer not to demand duty on goods claimed by the manufacturer as unfit for marketing, subject to conditions. On the admitted facts, the damaged goods were unfit for human consumption or marketing, and the circumstances justified remission rather than duty demand. Once duty itself was not sustainable, penalty could not survive.

Conclusion: Duty demand and penalty were not sustainable.

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