Remission of excise duty on molasses loss requires notice, hearing, and a speaking order before rejection

Remission of excise duty on loss or destruction of molasses in approved premises requires the proper officer's satisfaction on the relevant facts, and that satisfaction must be reached through a quasi-judicial process. Because no show-cause notice or personal hearing was given, and the communication was not a speaking order by the Commissioner, the rejection of remission breached the proviso and natural justice. Uncertainty also remained on material facts, including whether the pit was approved. The matter was therefore remitted to the Commissioner for fresh adjudication after granting reasonable opportunity of hearing and passing a speaking order.

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Issues: Whether the rejection of the remission claim under the first proviso to Rule 49(1) of the Central Excise Rules, without issuing a show-cause notice and without granting a personal hearing, could be sustained, and whether the matter required remand for fresh adjudication.

Analysis: The remission provision applies to loss or destruction of molasses in approved premises due to natural causes or unavoidable accident, and the proper officer must be satisfied on that question. That satisfaction cannot be reached without notice and an opportunity of hearing, because the decision is quasi-judicial in character. The record also showed uncertainty on material facts, including whether the pit was an approved pit, and the communication issued through the Additional Commissioner was not a speaking order passed by the Commissioner himself.

Conclusion: The rejection of remission was unsustainable for breach of the mandate of the proviso and the principles of natural justice. The matter was rightly remitted to the Commissioner to pass a speaking order after granting reasonable opportunity of personal hearing.

Ratio Decidendi: Where remission of excise duty depends on the proper officer's satisfaction about loss or destruction of molasses in approved premises, that decision must be preceded by notice, hearing, and a speaking order, failing which the matter is liable to be remanded.

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