Remission for natural storage loss in molasses allowed partly where open tank storage and delayed lifting caused shortage.

Molasses shortage during open storage in kachha pits was treated as partly attributable to natural and unavoidable causes, including seepage, driage, fermentation, rainwater mixing and delayed lifting by distilleries. The Tribunal held that remission of duty under the proviso to Rule 49 could not be denied merely because the molasses was stored in approved open tanks, as such storage was a recognised trade practice and the loss was partly beyond the assessee's control. Relief was granted to a reasonable extent, with remission allowed for 50% of the shortage and duty payable only on the balance quantity. The penalty was held unjustified and set aside.

---

---

Issues: Whether the shortage of molasses detected during storage was attributable to natural causes or unavoidable reasons so as to justify remission of duty under the proviso to Rule 49, and if so, to what extent.

Analysis: Molasses stored in open kachha pits for a long period was found to be susceptible to loss through seepage, driage, fermentation, and mixing of rainwater. The storage in approved open tanks was a normal trade practice, and the loss was aggravated by non-lifting of the molasses by distilleries despite allotment orders. The Tribunal held that the assessee could not be denied relief merely because the storage was in open tanks, and that the loss was partly due to causes beyond its control. Relying on the recognised susceptibility of molasses to natural loss and the departmental practice of allowing some allowance for storage loss, the Tribunal considered it to grant relief only to a reasonable extent.

Conclusion: Remission of duty was allowable in respect of 50% of the shortage, and duty was payable only on the balance quantity. The penalty was not justified and was set aside.

---