Remission of duty on molasses shortage cannot be denied where the shortage is condonable and no clandestine removal is proved.

Remission of duty on molasses shortage could not be denied merely by labelling the application an afterthought where it was filed within about a month of stock verification. The shortage was accepted as below 2%, the level treated by binding Board circulars as condonable, and no clandestine removal had been established; that allegation had already been rejected in connected proceedings. On those facts, there was no sustainable basis to infer that the remission request was intended to cover up an offence, and the denial of remission was unsustainable.

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Issues: Whether remission of duty on shortage of molasses could be denied on the ground that the remission application was an afterthought, when the shortage was below the permissible limit and no clandestine removal was established.

Analysis: The remission request was filed within about a month of stock verification and the only allegation in the show cause notice was that it was an afterthought to cover the detected shortage. The shortage was accepted as being below 2%, the limit treated by the Board's circulars as condonable, and those circulars were binding on the adjudicating authority. The allegation of clandestine removal had already been negatived in the connected demand proceedings, and there was no sustainable basis to treat the application as an attempt to cover up an offence.

Conclusion: The denial of remission was unsustainable, and the assessee was entitled to remission of duty.

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