Statutory remission for unfit excisable goods prevails over bond terms executed under permission, preserving excise relief.

Rule 49 of the Central Excise Rules, 1944 provided a statutory remission where excisable goods became unfit for human consumption, subject to conditions imposed by the Collector. A bond executed for storage in kutchha pits, taken in the context of statutory permission, could not override or exclude that remission entitlement. Contract-law principles under Section 56 of the Indian Contract Act, 1872 were treated as inapplicable to displace the excise remission scheme. The earlier tribunal view was followed, and the assessee's claim to remission was upheld.

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Issues: Whether duty remission was available under Rule 49 of the Central Excise Rules, 1944 when molasses became unfit for consumption, and whether the bond executed for storage in kutchha pits was void under Section 56 of the Indian Contract Act, 1872.

Analysis: Rule 49 provided a statutory remedy for remission where excisable goods became unfit for human consumption, subject to conditions imposed by the Collector. The dispute was not governed by a mere contractual arrangement; the special bond was executed in the context of a statutory permission, and its validity had to be tested in law. The principle relied upon by the Department from the import-licence context was held inapplicable because the present matter concerned statutory remission under excise law. Following the earlier tribunal view, the bond was not treated as defeating the statutory relief available to the assessee.

Conclusion: The bond was not accepted as a basis to deny remission, and the order allowing relief to the assessee was upheld.

Final Conclusion: The assessee's claim to remission remained intact, and the departmental challenge failed.

Ratio Decidendi: Where a statute confers remission on specified conditions, a bond taken in connection with statutory permission cannot be used to override or exclude the statutory entitlement, and contract-law principles will not displace the statutory scheme.

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