Destructive quality control testing and excise duty turn on strict compliance with removal, accounting, and remission procedure.

Wires and cables destroyed during mandatory quality control testing may escape central excise duty only if the assessee follows the prescribed removal and remission procedure, properly accounts for the tested goods and scrap, and establishes the destruction to the department. Where goods are removed after RG-1 entry, compliance with the procedure under Rule 49 of the Central Excise Rules, 1944, including proper entries and an application for remission, is required. On the stated facts, the assessee failed to satisfy those requirements and could not enable departmental verification of the testing or scrap, so duty liability was confirmed.

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Issues: Whether wires and cables removed after entry in RG-1 register for testing and destroyed during testing were liable to central excise duty, and whether remission could be denied for non-compliance with the prescribed procedure.

Analysis: The Tribunal accepted the principle that where a mandatory quality control test destroys the goods and the assessee properly accounts for the tested portions and the scrap, no excise duty is exigible. However, it held that where removal takes place after RG-1 entry, the prescribed procedure requires proper entries, accounting of rejects, and filing of an application for remission of duty in terms of Rule 49 of the Central Excise Rules, 1944. On the facts, the assessee had not followed that procedure, had not established that the tests were mandatory in the relevant manner, and had not enabled departmental verification of the goods taken for testing or the scrap generated.

Conclusion: The demand of duty was upheld and the appeal was rejected, against the assessee.

Final Conclusion: Non-compliance with the prescribed procedure for removal of goods for testing and remission justified confirmation of duty liability despite the plea of destructive testing.

Ratio Decidendi: Goods destroyed in a mandatory quality control test may escape excise duty only when the assessee follows the prescribed removal, accounting, and remission procedure and satisfactorily establishes the testing and destruction.

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