Remission for destroyed excisable goods requires factual verification before duty liability can be conclusively fixed.

Rule 49(1) permits duty to remain uncollected until clearance, and its second proviso allows remission where excisable goods are shown to be unfit for consumption or marketing, subject to conditions recorded in writing. Where hydrochloric acid was claimed to have been destroyed, the factual basis of destruction and unmarketability had to be verified before duty could be conclusively fixed. The corresponding duty position on chlorine used in manufacture also required fresh examination to the extent linked with the disputed quantity of acid. The principle is that remission claims on destroyed goods turn on factual verification and statutory satisfaction before liability is determined.

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Issues: Whether duty could be demanded on hydrochloric acid alleged to have been destroyed, whether the claim of destruction and unfitness for marketing required verification under Rule 49(1), and whether the duty position on chlorine used in the manufacture of such hydrochloric acid required fresh examination.

Analysis: Rule 49(1) permits non-collection of duty on excisable goods until clearance, and its second proviso contemplates remission where goods are claimed to be unfit for consumption or marketing, subject to conditions imposed by the Collector in writing. The factual basis of the assessee's claim that hydrochloric acid was destroyed and could not be marketed was not verified by the Revenue. The majority and the President accepted that the matter should not be finally decided against the assessee without such verification. Since chlorine used for manufacture of hydrochloric acid would stand exempt if the acid is found to have been destroyed, the chlorine issue also required de novo examination to the extent linked with the disputed quantity of hydrochloric acid. The plea that chlorine at the relevant stage was not commercially known as chlorine was left open for factual inquiry.

Conclusion: The matter was remanded to the Assistant Collector to verify the assessee's claim of destruction of hydrochloric acid, restrict duty to the quantity not proved to have been destroyed, and examine afresh the duty position on the corresponding chlorine.

Final Conclusion: The dispute was not finally resolved on merits and was sent back for factual determination on destruction, marketability, and the consequential duty liability.

Ratio Decidendi: Where remission of duty is claimed on excisable goods alleged to have been destroyed, the claim must be factually verified and the statutory satisfaction contemplated by Rule 49(1) must be reached before duty liability can be conclusively determined.

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