Remission of duty under Rule 21 requires proof of unavoidable loss or unfit goods; preventable water damage was insufficient.

Remission of duty under Rule 21 is available only when excisable goods are lost or destroyed by natural causes or unavoidable accident, or are proved unfit for human consumption or marketing. Damage to pan masala caused by rainwater entering the premises was treated as preventable through proper storage and precautions, and no competent evidence showed the goods had become unfit for use or sale. Receipt of insurance compensation further weakened the claim. On these facts, remission was not admissible and the disallowance was sustained.

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Issues: Whether remission of duty under Rule 21 of the Central Excise Rules was admissible for damaged pan masala goods alleged to have been spoiled when rainwater entered the premises.

Analysis: Remission under Rule 21 is available only where the goods are lost or destroyed by natural causes or unavoidable accident, or are shown to be unfit for human consumption or marketing. The damage here resulted from rainwater entering the factory and storage area, which was held to be preventable by proper care and precautions. No satisfactory evidence or competent certificate was produced to show that the goods had become unfit for human consumption. The claim was also weakened by the fact that insurance compensation had been received, and the loss was attributable to the assessee's own negligence in storage.

Conclusion: Remission of duty was not admissible, and the disallowance was upheld against the assessee.

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