Remission of duty for fire-damaged goods cannot be denied merely because the exact cause of the fire is unknown.

Remission of duty on excisable goods destroyed by fire cannot be refused merely because the exact cause of the fire is uncertain, where contemporaneous evidence supports the occurrence of the fire and there is no material indicating clandestine removal or mala fide conduct. On the facts, the fire officer's certificate, insurance survey report, godown storage and police record supported the loss, so total rejection of remission was not justified. However, the record was insufficient to fix the exact quantity and value of goods eligible for remission, so the matter had to be remanded for fresh determination on an accurate factual basis.

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Issues: (i) whether remission of duty could be denied in respect of sugar bags destroyed in a fire on the ground that the precise cause of the fire was not known and the assessee had not established due precautions; (ii) whether the matter required remand for determination of the correct quantity and value of goods eligible for remission.

Issue (i): whether remission of duty could be denied in respect of sugar bags destroyed in a fire on the ground that the precise cause of the fire was not known and the assessee had not established due precautions.

Analysis: The fire was not disputed, and the contemporaneous certificate of the fire officer supported the occurrence and extinguishment of the fire. The insurance survey report indicated internal combustion as the cause and supported settlement of the claim for part of the loss. The goods were stored in a proper godown, there was no material showing clandestine removal or any make-believe fire, and the surrounding circumstances, including the police panchnama, did not suggest foul play. In these circumstances, mere inability of the assessee to state the exact cause of fire could not justify total rejection of remission.

Conclusion: Remission of duty could not be denied merely because the precise cause of fire was not known; the rejection of remission was not justified and was against the assessee.

Issue (ii): whether the matter required remand for determination of the correct quantity and value of goods eligible for remission.

Analysis: The record was insufficient to determine the exact quantity of sugar eligible for remission, particularly because the details of reprocessed sugar cleared on payment of duty and the basis on which the demand had been worked out were unclear. The insurance survey report was also not before the adjudicating authority when the order was passed, and the factual data necessary for a final computation was incomplete.

Conclusion: The matter had to be remanded to the Collector for fresh determination of the quantity and value eligible for remission in accordance with law.

Final Conclusion: The assessee succeeded on the principle that remission could not be refused in a fire-loss case on the sole ground that the precise cause of fire was not known, but the exact fiscal relief had to be reworked on a proper factual basis by the adjudicating authority.

Ratio Decidendi: Where destruction of excisable goods by fire is supported by contemporaneous evidence and there is no material of clandestine removal or mala fide conduct, remission cannot be rejected merely because the exact cause of fire is uncertain; however, final allowance depends on accurate determination of the quantity and value of the goods lost.

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