DESTRUCTION OF EXCISABLE GOODS

[S.C. WADHWA]

Dear Experts,

We are manufacturers of food products and our some products attacting nil rate of duty and other 6% of
duty. We produced and store stocks of both varities in our godown after getting confirmed order from buyers.
Buyers could not lift the entire stocks during the expiry period. We have raised debit notes for the stocks
expired.
Now my query is that we want to destroy the stocks of exempted and dutiable both. Please give your expert
opinion whether we have to inform excise authorities and wait for their super-vision or destroy the stocks
after giving them any intimation.
Regards,
WADHWA

[Rajagopalan Ranganathan]

Sir,

The procedure for destruction of goods is as follows: -

REMISSION OF DUTY AND DESTRUCTION OF GOODS

1. Legal Provision

1.1 Rule 21 of the Central Excise Rules, 2002 provides for remission of duty in certain situations.

1.2 Where it is shown to the satisfaction of the Central Excise Officers specified in the Table below that goods have been lost or destroyed by natural 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 Table on such goods as to the extent specified in the corresponding entry in the said Table, subject to such conditions as may be imposed by him by order in writing 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 officer has passed the order for remission.

TABLE

 

Sl.No.	Competent Central Excise Officer	Amount of duty empowered to remit	Monetary limit to supervise destruction
(1)	(2)	(3)	(4)
1.	Commissioner	Without limit, but normally any amount exceeding ₹ 5,000
2	Additional/Joint Commissioner	₹ 2,500 to ₹ 5,000
3	Deputy/Assistant Commissioner	₹ 1,000 to ₹ 2,500	Exceeding ₹ 20,000
4	Superintendent	Below ₹ 1000	Rs.5000 but not exceeding ₹ 20,000
5	Inspector	None	Below Ks. 5,000

 

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

However the above procedure is applicable only to dutiable goods. It will not apply to non-excisable goods or unconditionally exempted goods.

[ashish chaudhary]

You need to await the order from competent authority granting permission of destroy of excisable goods. Exempted goods can be destroyed without taking permission. But suggested to intimate to dept as both goods maintained at same premise. Maintain separate records evidencing quantitative details of goods of both type.

[S.C. WADHWA]

Dear Experts,

The value of stocks of dutiable is ₹ 100000/-. Some party want to get it for ₹ 10000/- Plus taxes. We are ready to sell these items for ₹ 10000/- after paying duty @2.06%.

Now my query is whether deptt has any objection in this regard. Please give your expert opinion.

Regards,

Wadhwa

[Rajagopalan Ranganathan]

Sir,

You have to convince the department with reasons for selling the stocks wotth Rs. 1,00,000 for ₹ 10,000. Otherwise the department will allege that you have sold the stocks at very low price to evade payment of proper duty.

AI Summary

Manufacturers must seek permission to destroy dutiable goods; exempted goods can be destroyed with intimation. A manufacturer of food products sought advice on the destruction of expired stocks, including both exempted and dutiable goods. They inquired whether they need to inform excise authorities and wait for supervision. Experts advised that destruction of dutiable goods requires permission from competent authorities, while exempted goods can be destroyed without permission, though intimation is recommended. The manufacturer also considered selling dutiable goods worth 100,000 for 10,000 plus taxes and queried potential objections from the department. An expert suggested convincing the department to avoid allegations of duty evasion.