Statutory provisions :

Section 5 of the Central Excise Act, 1944 empowers the Central Government to grant remission of duty leviable on excisable goods, where there is a deficiency in the quantity due to natural causes. Rule 21 of the Central Excise Rules, 2002 provides for remission of duty in certain situations.

Where it is shown to the satisfaction of the Commissioner that goods have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal, he may remit the duty payable on such goods as specified in the corresponding entry in the said Table, subject to such conditions as may be imposed by him by order in writing. The term “Commissioner” shall be substituted depending upon the liability, as given in the Table below. The competence to supervise destruction of excisable goods claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal has also been specified in column 4 of the said Table. Destruction shall be carried on only after the competent officers have passed the order for remission.

S.No.	Competent Central Excise Officer	Amount of duty empowered to be remitted
1	Commissioner	Without limit, but normally any amount exceeding ` 5,00,000
2	Additional/Joint Commissioner	` 1,00,000 to ` 5,00,000
3	Deputy/Assistant Commissioner	` 10,000 to ` 1,00,000
4	Superintendent	Below ` 10,000
5	Inspector	None

The proper officer may not demand duty (remit duty) due on any excisable goods, including “tea‟, claimed by the manufacturer as unfit for consumption or marketing provided the goods are destroyed irrecoverably under the supervision of the proper of ficer, and subject to the procedure, specified hereinafter.

The remission of duty can be done only in cases where goods have been lost or destroyed by natural causes or by unavoidable accident. If the goods are destroyed by accident which could have been avoided in such circumstances remission of duty cannot be done. For example, goods were destroyed by fire. Such fire occurred due to short circuit. The arrangements for safety and security of goods were not proper to prevent the fire. The fire could have be en avoided if proper safety measures were in place. Hence, the remission of duty cannot be done.