1. Remission of duty and Destruction of goods
1.1 Rule 21 of the Central Excise (No.2) Rules, 2001provides for remission of duty in certain situations.
1.2 Where it is shown to the satisfaction of the Central Excise Officers specified in Table below that goods have been lost or destroyed by natural causes 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 duty payable on such goods as 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 officers have passed the order for remission.
1.3 The proper officer may not demand duty (remit duty) due on any excisable goods, 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.
1.4 The procedure to be followed for destruction of goods and remission of duty thereon shall be, as follows:
2. Manner of destruction
2.1 The goods intended and presented before the proper officer for destruction must be destroyed in such a manner that they become irretrievable as excisable commodity. The actual 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 cheroots may be destroyed by fire. Electric bulb and batteries may be destroyed by crushing into bits and scraps. Vegetable oils and vegetables products may be destroyed by mixing earth or kerosene and dumping into pits. Whatever method of destruction is adopted, the officer supervising the destruction will satisfy himself that the destroyed goods cannot be marketed. If there is any doubt with regard to the suitability of any particular method for destruction of any goods, the officer destroying the goods will refer the matter to his superior officer for orders.
2.2 The officer supervising the destruction must endorse under his signature the relevant records/ documents such as AR-1, invoices, RG-1, EB-4, RG23A, RG23C or other relevant factory records indicating the description and quantity of the goods destroyed in his presence at which time and on which day.
2.3 Immediately after destruction of the goods is completed, the officer supervising destruction must also send a certificate to his immediate superior, countersigned by the factory manager and the factory officer in the prescribed form.
2.4 Where excisable goods are manufactured out of inputs goods on which CENVAT credit was availed, proportionate credit should be reversed before destruction of such goods.
2.5 There will be no limit on the executive powers of the Commissioners to order remission of duty in such cases. However, it has been decided that as a measure of administrative control and information, where the duty amount exceeds Rs.5 lakhs in a case, the Commissioners will send a report to the Board giving sufficient details of such cases.
2.6 No remission of duty in case of theft should be allowed, since the goods are available for consumption somewhere.
1. Over time Fee
11 Wherever an assessee or exporter is required services of Central Excise Officers for supervision in accordance of any procedure specified in this regard by rules or instructions beyond office hours or on Sundays, Saturday or public holidays and where there is no specific posting of Officers in shifts by any Office order, he shall be required to pay Merchant Overtime at the rates specified under the Customs Act, 1961 under Customs (Fees for Rendering Services by Customs Officers) Regulation, 1998.
.2 If a manufacturer or exporter requisitions services of Central Excise Officers for supervision and examination of export cargo and stuffing in containers at his premises, such Officers also discharge functions of a "Customs Officers".
1. Recovery of dues
1.1 In the event the Government dues are not paid the law provides for recovery thereof. For the recovery of dues the provisions of Section 142 of the Customs Act, 1962 have been made applicable to like matters in Central Excise by Notification No. 68/63-Central Excise dated 4.5.1963 issued under Section 12 of the Central Excise Act, 1944.
1.2 If the stay application is filed by the assessee against the Order-in-Original confirming the duty demand, no coercive action should be taken to realise the dues till the disposal of the stay application by the Commissioner of Central Excise (Appeal). However, the Commissioner (Appeal) must dispose of the stay application within one month of its filing.
1.3 A period of 3 months from the date of communication of the order-in-original/ order-in appeal should be normally be provided for (one month for filing appeal and stay application and two more months for obtaining orders on the stay application), before taking coercive measures to recover the dues. However, iIf a stay application of an assessee is rejected by an appellate authority even before the lapse of the time limit of three months, recovery proceedings should be initiated immediately thereafter.
1.4 In respect of cases decided by Commissioner of Central Excise (Appeals), Tribunal, Government of India or High Court, the assessee should be given a maximum period of one month from the date of communication of the Order to pay up the dues before resorting to any coercive action. In case of decision of Supreme Court of India, the assessee should pay the Government dues, if any, forthwith or else the recovery proceedings, shall be initiated within 15 days of the communication of the order.
1. Return of duty paid goods
1.1 Rule 16 of the said Rules provides for return of any goods, on which duty has been paid at the time of removal, to the factory for being re-made, refined, re-conditioned or for any other reason. In such cases, the assessee shall state the particulars of such return in his records and shall be entitled to have CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2001 and utilise this credit according to the said rules. As per this rule the goods should return to the same factory in which they were produced.
1.2 If the goods so returned are subjected to certain process which do not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken.
1.3 In any other case [where the returned goods are subjected to process(es) amounting to manufacture] the manufacturer shall pay duty at the rate applicable on the date of removal and on the value determined under Section 4 or Section 4A of the Act, as the case may be.
1.4 In the event the assessee has any difficulty, the Commissioner is empowered to resolve the same and permit the entry of the goods into the factory and the availment of CENVAT credit thereon. For this the Commissioner, either on case to case basis by special order or to be applied to "particular type of case" by general order, impose such conditions as may be necessary for safeguarding interest of revenue.