Duty remission for flood loss requires contemporaneous proof and disclosure; suppression can justify the extended limitation period.

Duty remission for alleged flood-related loss of cement clinker requires contemporaneous evidence that the goods were lost or destroyed by natural causes or unavoidable accident, together with timely disclosure to excise authorities. On the facts discussed, the absence of production or loss records, no intimation to the department, and only a balance sheet reference were treated as insufficient to prove the loss, so the remission claim failed and the duty demand was sustained. The commentary also states that non-maintenance of records and nondisclosure supported a finding of suppression, justifying use of the extended limitation period; the penalty was reduced, but the demand was otherwise upheld.

---

---

Issues: (i) Whether the appellant was entitled to duty remission for alleged loss of cement clinker by floods under Rule 49 of the Central Excise Rules, 1944; (ii) whether suppression of facts was established so as to justify invocation of the extended period under Section 11A of the Central Excises and Salt Act, 1944.

Issue (i): Whether the appellant was entitled to duty remission for alleged loss of cement clinker by floods under Rule 49 of the Central Excise Rules, 1944.

Analysis: Duty remission under Rule 49 required the assessee to satisfy the proper officer that the goods were lost or destroyed by natural causes or unavoidable accident. The appellant produced no contemporaneous records, no intimation to the excise authorities, and no reliable evidence to substantiate the plea that the clinker was washed away in floods. Mere reference in the balance sheet was not sufficient to establish the loss for remission purposes.

Conclusion: The claim for duty remission was rejected and the duty demand was upheld against the assessee.

Issue (ii): Whether suppression of facts was established so as to justify invocation of the extended period under Section 11A of the Central Excises and Salt Act, 1944.

Analysis: The record showed non-maintenance of production or loss registers and no disclosure of the alleged loss to the department at the relevant time. In the absence of contemporaneous documentation and explanation, the plea that there was no suppression could not succeed. The facts supported a finding of clandestine clearance and justified the longer limitation period.

Conclusion: Suppression was established and the extended period of limitation was rightly invoked against the assessee.

Final Conclusion: The duty demand was sustained in full, while the penalty was reduced, leaving the appeal only partly successful.

Ratio Decidendi: A claim for remission of duty on loss by natural causes must be proved by contemporaneous evidence and timely disclosure to the excise authorities, and failure to maintain records or report the loss can sustain a finding of suppression warranting the extended limitation period.

---