Remission of duty on deteriorated molasses was upheld where goods became unfit for marketing before removal from the factory.

Remission of duty was treated as available for molasses that deteriorated by natural causes and became unfit for marketing while still within the factory premises. Rule 49 of the Central Excise Rules, 1944 was applied to goods lost or destroyed by natural causes, or rendered unfit for human consumption or marketing before removal. Storage in approved masonry tanks within the factory layout, with departmental permission, supported the claim, and the absence of a bond did not by itself defeat remission where the goods had not been removed. The rejection of the remission claim was therefore set aside in favour of the assessee.

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Issues: Whether remission of duty was admissible on molasses that had deteriorated due to natural causes and become unfit for marketing while remaining within the factory premises.

Analysis: Rule 49 of the Central Excise Rules, 1944 permitted remission where excisable goods were lost or destroyed by natural causes or became unfit for human consumption or marketing before removal. The molasses in question was found to have deteriorated and been rendered unfit for marketing, and the storage arrangements in the masonry tanks were within the approved factory layout and had the Department's permission. The absence of a bond and the fact that the goods had not been removed from the factory weighed against denial of remission on the basis of the Board's circulars alone.

Conclusion: Remission of duty was admissible and the rejection of the claim was set aside, in favour of the assessee.

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