Remission of duty on auto-combustion loss upheld where reasonable preventive steps defeated allegations of negligence

Remission of duty was treated as allowable where molasses was destroyed by auto-combustion, because the assessee had taken reasonable preventive steps once the temperature rise was noticed. The record showed circulation of the molasses, use of ice slabs and anti-foaming chemicals, and prompt intimation to the Department, which negated any finding of improper storage, negligence or carelessness. On that footing, the loss was regarded as accidental rather than attributable to the assessee, and the duty demand and penalty were set aside.

---

---

Issues: Whether remission of duty was allowable on molasses destroyed by auto-combustion, where the loss was alleged to have resulted from improper storage and negligence on the part of the assessee.

Analysis: The molasses caught fire by auto-combustion during the peak summer month. The record showed that once the rise in temperature was noticed, the assessee took steps to prevent further deterioration, including circulation of molasses, addition of ice slabs and anti-foaming chemicals, and also informed the Department by letters and telegrams. These facts indicated that the assessee had taken all reasonable steps that a prudent person would take to protect the goods from destruction or deterioration. On that basis, the loss could not be attributed to improper storage, negligence or carelessness.

Conclusion: Remission of duty was held to be allowable and the demand and penalty were set aside.

Final Conclusion: The appeal succeeded, and the assessee was granted relief from the duty demand arising from the accidental loss of molasses.

Ratio Decidendi: Where goods are destroyed by auto-combustion despite timely and reasonable preventive steps by the assessee, the loss cannot be treated as arising from negligence or improper storage, and remission of duty is warranted.

---