ORDER
Gowri Shankar, Member (T)
1. The appellant is a sugar factory. As a result of a fire which took place in its factory, considerable quantity of sugar manufactured and stored, pending clearance on payment of duty, was destroyed or damaged. Appellant, after obtaining permission, reprocessed part of the damaged sugar and it claimed remission of duty on the sugar destroyed. Remission was refused in the proceedings before the Assistant Collector, whose order was confirmed by the Collector (Appeals). In appeal, this Tribunal allowed the assessee’s appeal by way of remand, directing the Collector (Appeals) to decide the case afresh, after considering the evidence produced by the assessee, as to the cause of the fire which resulted in the destruction of the sugar. In pursuance of this order, the Collector (Appeals) has passed an order rejecting their claim for remission. Hence this appeal.
2. The advocate for the appellant contends that the causes of the fire accident is not ascertainable. He points out that the report of the insurance company dated 7-7-1987 makes this clear. There might be a short circuit and the possibility of fire having been caused as a result of smoking by an employee and it also suggests the possibility of the fire having been caused by continuous combustion of the sugar in the event that the bags containing sugar were wet. He says that this is at best a speculative statement and cannot lead to the conclusion which the Collector has drawn, that the fire was caused by spontaneous combustion because of negligence by the appellant of storing it in wet bags. The advocate for the appellant relies upon this Tribunal’s decision in Kalambar V.S.S.K. Ltd. v. Collector of Central Excise, Aurangabad -1995 (76) E.L.T. 130 (Tribunal).
3. The Departmental Representative emphasises that in the interim report dated 3-3-1986, the insurance company had attributed cause of the fire to spontaneous combustion of the sugar. He contends that this could have been prevented by proper storage in appropriate gunny bags. He further contends that it is the discretion of the proper officer for grant of remission or not and the proper officer did not find in giving remission in this case. The Departmental Representative relies on the decision of the Andhra Pradesh High Court in Kandimalla Raghva v. Government of India -1985 (21) E.L.T. 693.
4. The interim report No. 1986, dated 3-3-1986 of the surveyor is not available before us. However, its final survey report, itself refers to this report and says “the cause of fire appeared to be spontaneous combustion in gunny bags in which sugar was packed”. This is, in our view, a tentative statement and not a conclusive determination. The insurance company had, in reply to a query, informed the Superintendent as follows :
“The exact cause of the fire could not be ascertained. There being no electrical connections in the godown, chances of electrical short circuit are ruled out. On making inquiries, we were informed that the workers were generally not in habit of smoking and hence the chances of the fire being caused by the bidi or cigarette butt are also very remote. There appears some possibility of spontaneous combustion in the gunny bags in which sugar was packed in case some moist bags were used for storage of sugar.
We are therefore conveying to the Central Excise Department on the above lines the cause of the fire as intimated by you to our surveyors and which has been incorporated in the survey report. We shall thank you to let us have your confirmation as per return post.”
A reading of this cannot lead any one to conclude that it has not been estab-lished conclusively or even beyond reasonable doubt that it was a spontaneous combustion in the gunny bag which left the fire or that such spontaneous combustion took place because of bags were moisturised. It would thus follow that it cannot be said that the fire was caused by negligence of the appellant in failing to take reasonable precaution. There is nothing on record that this was the case. The decision of the Tribunal cited by the advocate for appellant was one that related to loss of sugar due to fire by spontaneous combustion or internal combustion, as in that case, we find that there is no suggestion here that the sugar was removed clandestinely, or that the fire was a cover to shift the appellant from such clandestine removal or other illegal activity. The occurrence of fire has been reported on the date of its occurrence to the department and to the police. The panchnama was drawn in village Talati. The fact that appellant reprocessed the damaged sugar and recovered 38,000 quintals which had cleared on payment of duty further goes to establish its bona fide. Considering all these evidences, we are of the view that it is not possible to say that the fire which destroyed the sugar was not caused by unavoidable accident. The appellant’s claim for remission of duty therefore would have to be acceded to.
5. The decision of the Andhra Pradesh High Court cited by the Departmental Representative does not lead to the conclusion that because of the existence of discretion, it has not to be exercised in favour of the assessee at all. All that is laid down is that when the goods are lost or destroyed by unavoidable accident, the Collector must exercise his discretion with regard to the duty to be remitted. It is therefore appropriate that the Proper officer now decides the quantity of sugar which was destroyed in the fire accident on which remission is to be granted. We therefore allow the appeal and send the matter back for decision on this limited issue.
6. Appeal allowed.