Remission of central excise duty allowed for goods destroyed in an accidental factory fire without proven negligence.

Accidental destruction of finished excisable goods in a factory fire can qualify for remission of central excise duty where the evidence shows an unavoidable accident and there is no reliable proof of negligence or any other non-accidental cause. The record relied on the fire being described as accidental, including a short-circuit explanation and the FIR, while the alleged failure by an employee to switch off lights was unsupported. On that material, the destruction fell within the proviso to Rule 49(1) of the Central Excise Rules, 1944, and the quantity of goods destroyed was treated as established, making the duty demand unsustainable.

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Issues: Whether the assessee was entitled to remission of central excise duty on finished goods destroyed in a factory fire as being destroyed by natural cause or unavoidable accident.

Analysis: The record indicated that the fire was accidental, with the excise executive stating that it appeared to have started due to a short circuit and the FIR describing the incident as accidental. No evidence supported the finding that an employee had failed to switch off lights or that the fire resulted from negligence. In the absence of contrary evidence, the destruction of goods by fire fell within the scope of the proviso to Rule 49(1). The quantity of goods destroyed was also treated as sufficiently established on the material placed on record.

Conclusion: The assessee was entitled to remission of duty under the proviso to Rule 49(1) of the Central Excise Rules, 1944.

Final Conclusion: The duty demand was not sustainable and the assessee succeeded in full on the remission claim.

Ratio Decidendi: Where goods are destroyed in an accidental fire and there is no reliable evidence of negligence or any other non-accidental cause, remission of duty is allowable under the proviso governing destruction by unavoidable accident.

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