Remission of duty for auto-combustion loss of molasses turns on approved storage, reasonable precautions, and natural cause

Remission of duty on molasses lost by auto-combustion was examined under Rule 49, which allowed relief where excisable goods were lost or destroyed by natural causes or unavoidable accident during storage in approved premises. The approval record showed the tanks had been permitted for storage, and later withdrawal of permission for kuccha pits took effect only after the incident, so the storage objection failed. The negligence objection also failed because the notice lacked specific omissions and the assessee had promptly informed the police and fire brigade and acted to reduce damage. The analysis treated auto-combustion of molasses as a natural phenomenon in suitable conditions, supporting remission.

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Issues: Whether remission of duty was admissible on molasses lost by auto-combustion, in the light of the department's objections that the goods were stored in unapproved premises, that the loss was due to negligence, and that the loss was not due to natural causes.

Analysis: Rule 49 contemplated remission where excisable goods were lost or destroyed by natural causes or unavoidable accident during storage in approved premises, subject to the proper officer being satisfied about the validity of the claim. The approved site plan on record showed that the tanks in which the combustion occurred had earlier been approved for storage, and the later withdrawal of permission for kuccha pits took effect only after the incident. The Trade Notice did not itself withdraw the earlier permission. On negligence, the show cause notice did not set out the specific precautions allegedly omitted, while the record showed prompt action by the assessee, including informing the police and fire brigade and taking steps to reduce the damage. The record also supported the view that auto-combustion of molasses is a natural phenomenon, particularly in high ambient temperature conditions.

Conclusion: Remission of duty was admissible and the objection based on unapproved storage, negligence, and absence of natural cause failed.

Ratio Decidendi: Where excisable goods are lost by auto-combustion, remission cannot be refused if the goods were stored under subsisting approval and the assessee shows that reasonable precautions were taken and the loss was due to natural causes or unavoidable accident.

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