Destruction of Goods - Central Excise Practice Manual (OLD) - Central Excise

DESTRUCTION OF GOODS If finished goods entered in DSA (Daily Stock Account) are found unfit for consumption or marketing, these are to be destroyed after obtaining permission so that remission of the duty payable on such goods can be obtained. The procedure to be followed for permission of destruction of goods in order to get remission of duty payable on such goods, is as follows: - 1. An application in duplicate to the Range Officer is to be submitted giving following information - Details of the goods required to be destroyed, Reasons for destruction, Proof that the goods have become unfit for consumption. - Ordinarily the views of assesses that the goods are rendered unfit for consumption or marketing should be accepted, or - In case of doubts, the competent authority may order drawing of samples and its testing, such as chemical test or any other test, by a Government recognized laboratory. 2. The application will be quickly processed by the Range Officer. In case the matter falls within the competency of superior officer, he will forward the application with his recommendations to the Deputy/ Assistant Commissioner within 15 days of receipt. Further if the case does not relates to his competency too, he will forward the application with his remarks to further superior authority within 3 days. 3. The competent officer will scrutinize the application and based upon the information given by the assessee, if found in order, grant permission (for destruction of goods and remission of duty) within a period of 21 days or earlier, if possible. Where samples are drawn, such permission should be granted within 45 days. 4. Actual destruction should be supervised by competent excise authority, according to the monetary limit, as follows: - By Inspector - if amount of duty is upto Rs.5,000/- By Superintendent - if duty is between Rs.5,000/- to Rs.20,000/- AC/ DC - if duty exceeds Rs.20000 upto any limit Where only physical verification is required, the same may be conducted by the remission granting authority [see chapter no.30 for remission granting authority], and it is upon his satisfaction that destruction of goods may be allowed. 5. The date and time for destruction of goods should be fixed by mutual convenience of the proper officer and assessee. It should be ensured that: - The same time and date are not fixed for more than one assessee, and There is no inordinate delay once permission is granted. 6. In case of frequent requests for destruction of goods by an assessee, necessary enquiries into the cause thereof should be conducted before granting permission for destruction of goods. 7. The clearance of goods, within or outside the factory premises, shall be done under an invoice, indicating 'Nil' duty. The order permitting destruction and remission should be quoted on the invoice. As far as possible destruction should be made inside the factory. 8. The goods should be destroyed in such a manner that they become irretrievable as excisable commodity. Manner of destruction is as follows: - As per the nature of the goods. For e.g. - Matches, cotton, rayon and woolen fabrics, paper, cigar and cheroots may be destroyed by fire. - Electric bulb and batteries may be destroyed by crushing into bits and scraps. - Vegetable oils and vegetable products may be destroyed by mixing earth or kerosene and dumping into pits, or In case of doubt with regard to the suitability of any method for destruction of goods, the officer destroying the goods may refer the matter to his superior officer for orders. Whatever method of destruction is adopted, the officer supervising the destruction will satisfy himself that the destroyed goods cannot be marketed neither as a scrap. 9. After destruction, the officer should send a report to his immediate superior, countersigned by the factory manager and the factory officer in the prescribed form. 10. When excisable goods are manufactured out of the inputs goods on which Cenvat credit was availed, proportionate credit should be reversed before destruction of such goods.