reversal of central excise on goods damaged in transit

[SRINIVAS Parampalli]

kindly advise under which section of central excise rule can excise duty reversal can be made on finished goods cleared from factory after payment of duty. The goods carrying vehicle had met with an accident and the damaged machine brought back to factory. The machine cannot be repaired and had to be scraped. Also advise if CST paid on such goods can be reversed. Or is there any provision under central excise that duty can be adjusted against new machine that shall be supplied. Is it required the invoice raised on damaged goods to be cancelled

AI Summary

Excise duty on damaged goods: no reversal for duty paid clearances; fresh duty due on scrapped or replacement machinery.
Excise duty already paid on goods cleared from a factory need not be reversed when the goods are damaged in transit; such duty-paid goods can be returned to any factory for repair and the duty paid may be taken as credit by the receiving factory. If the machinery is irreparable and scrapped, duty must be paid on the transaction value of the scrap, and the duty on damaged goods cannot be adjusted against a new replacement machine, which will attract fresh duty. Insurance recovery for value and duty is a possible option if coverage exists.