CHAPTER 18

Miscellaneous Provisions

PART-I

Remission of duty and Destruction of goods
1. Remission of duty and Destruction of goods

1.1 Rule 21 of the Central Excise (No.2) Rules, 2001 provides for remission of duty incertain situations.

1.2 Where it is shown to the satisfaction of the Central Excise Officers specified inTable below that goods have been lost or destroyed by natural causes or byunavoidable accident or are claimed by the manufacturer as unfit for consumption orfor marketing, at any time before removal, he may remit the duty payable on suchgoods as specified in the corresponding entry in the said Table, subject to suchconditions as may be imposed by him by order in writing. The competence to supervisedestruction of excisable goods claimed by the manufacturer as unfit for consumption orfor marketing, at any time before removal has also been specified in column 4 of thesaid Table. Destruction shall be carried on only after the competent officers have passedthe order for remission.

Sl. No.	Competent CentralExcise Officer	Amount of duty empoweredto remit	Monetary limit tosupervisedestruction
1	Commissioner	Without limit, butnormally any amountexceeding Rs. 5,000	Notrequired
2	Additional/JointCommissioner	Rs. 2,500 to Rs. 5,000	Notrequired
3	Deputy/AssistantCommissioner	Rs. 1,000 to Rs. 2,500	ExceedingRs. 20,000
4	Superintendent	Below Rs. 1,000	Rs. 5,000but notexceeding Rs.20,000
5	Inspector	None	Below Rs. 5,000

1.3 The proper officer may not demand duty (remit duty) due on any excisablegoods, including ‘tea’, claimed by the manufacturer as unfit for consumption ormarketing provided the goods are destroyed irrecoverably under the supervision of theproper officer, and subject to the procedure, specified hereinafter.

1.4 The procedure to be followed for destruction of goods and remission of dutythereon shall be, as follows:

(i) A manufacturer desiring to destroy and seek remission of duty in respect ofthe excisable goods manufactured in his factory, in terms of proviso to sub-rule(1) of rule 49 on the grounds that the said goods have been renderedunfit for consumption or for marketing, will make an application in duplicateto the Range Officer indicating complete details of the goods and reasonsfor destruction, along with the proof that the goods have become unfit forconsumption or for marketing such as report of chemical test or any othertest, conducted by a Government recognised laboratory.

(ii) The application will be quickly processed by the Range Office. In case theRange Officer is competent to allow destruction and remission (in terms ofpara 2.2 above) he will proceed to take necessary action at his level. In casethe matter falls within the competency of superior officer, he will forward theapplication along with his recommendation to the Deputy/AssistantCommissioner within 15 days of receipt.

(iii) The Deputy/Assistant Commissioner will scrutinise the application and basedupon the information given by the assessee, if found in order, allowdestruction of goods and remission of duty, if the case relates to hiscompetency. Otherwise, he will forward the application with his remarks tothe superior authority competent to give permission for destruction andremission (Additional/Joint Commissioner or Commissioner, as the case maybe) within 3 days.

(iv) Where only physical verification is required, the same may be conducted bythe remission granting authority (proper officer), as specified above andupon his satisfaction, destruction of goods and remission of duty may beallowed.

(v) In case of any doubts, the competent authority may, for reasons to berecorded in writing, order for drawing of samples and its testing by theCentral Revenue Control Laboratory or the Customs House Laboratories orany other Government recognised laboratories where the aforementionedlaboratories cannot test the samples. The testing of samples will be done inthe manner specified in the Basic Excise Manual as modified by theinstructions issued, if any, by the Board in this regard.

(vi) Ordinarily the views of the assessees that the goods are rendered unfit forconsumption or marketing, should be accepted and necessary permissionshould be granted within a period of 21 days or earlier, if possible. Wheresamples are drawn, such permission should be granted within 45 days.

(vii) Actual destruction of goods should be supervised by the officers accordingto the monetary limits specified in column (4) of the Table in para 2.2 above.The date and time for destruction should be fixed by mutual convenience ofthe proper officer and the assessee and it should be ensure that the samedate and time are not fixed for more than one assessee. It should also beensured that there is no inordinate delay once permission for destruction andremission is granted.

(viii) In case of frequent requests for destruction of goods by an assessee,necessary enquiries into the cause thereof should be conducted beforeaccording permission for destruction of goods.

(ix) The proper officer personally supervising the destruction will check thequantity by physical verification i.e. by weight or by counting or usingappropriate method in case of liquid, as the case may be, and the identityof goods by reference to relevant records and the application fordestruction. The clearance of goods, within or outside the factory premises,shall be done on an invoice, indicating ‘nil’ duty. The order of the properofficer permitting destruction and remission, should be quoted on theinvoice.

(x) As far as possible, destruction should be made inside the factory.

2. Manner of destruction

2.1 The goods intended and presented before the proper officer for destruction must bedestroyed in such a manner that they become irretrievable as excisable commodity. Theactual method of destruction will depend upon the nature of the goods to be destroyed.For example, matches, cotton, rayon and woollen fabrics, paper, cigar and cherootsmay be destroyed by fire. Electric bulb and batteries may be destroyed by crushing intobits and scraps. Vegetable oils and vegetables products may be destroyed by mixingearth or kerosene and dumping into pits. Whatever method of destruction is adopted,the officer supervising the destruction will satisfy himself that the destroyed goods cannotbe marketed. If there is any doubt with regard to the suitability of any particular methodfor destruction of any goods, the officer destroying the goods will refer the matter to hissuperior officer for orders.

2.2 The officer supervising the destruction must endorse under his signature the relevantrecords/ documents such as AR-1, invoices, RG-1, EB-4, RG23A, RG23C or other relevantfactory records indicating the description and quantity of the goods destroyed in hispresence at which time and on which day.

2.3 Immediately after destruction of the goods is completed, the officer supervisingdestruction must also send a certificate to his immediate superior, countersigned by thefactory manager and the factory officer in the prescribed form.

2.4 Where excisable goods are manufactured out of inputs goods on which CENVATcredit was availed, proportionate credit should be reversed before destruction of suchgoods.

2.5 There will be no limit on the executive powers of the Commissioners to orderremission of duty in such cases. However, it has been decided that as a measure ofadministrative control and information, where the duty amount exceeds Rs.5 lakhs in acase, the Commissioners will send a report to the Board giving sufficient details of suchcases.

2.6 No remission of duty in case of theft should be allowed, since the goods areavailable for consumption somewhere.

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