Unavoidable fire loss of job-worker inputs qualifies for excise relief, so duty demand was not sustained.

Inputs sent to a job worker and destroyed in a fire before use in manufacture were treated as lost by unavoidable accident, with no finding of avoidable loss or contributory negligence by the assessee or the job worker. Under the proviso to Rule 49(1) of the Central Excise Rules, 1944, goods lost or destroyed by natural causes or unavoidable accident qualify for relief, so duty was not payable on the destroyed inputs and the demand was not sustained.

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Issues: Whether duty was payable on inputs sent to a job worker that were destroyed in fire before use in manufacture and were not returned within the stipulated period.

Analysis: The loss of the goods at the job worker's premises by fire was accepted. The destruction was treated as an unavoidable accident, and there was no finding of avoidable loss or contributory negligence on the part of the assessee or the job worker. Under the excise law, goods lost or destroyed by natural causes or by unavoidable accident are eligible for relief under the proviso to Rule 49(1) of the Central Excise Rules, 1944.

Conclusion: Duty was not payable on the goods so lost, and the demand was not sustained.

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