Duty liability and rule 21

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Ritesh Singh (Querist)
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02 September 2012 If goods are destroyed in factory/outside the factory then Excise duty will be payable or not? If goods are not in condition to sell and sold as a scrap then excise duty will be payable or not?
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CA Suresh Jain

CA Suresh Jain (Expert)
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02 September 2012 The application for remission of duty should be made to jurisdictional Commissioner of Central Excise

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laxman ishwarrao mitba

laxman ishwarrao mitba (Expert)
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04 September 2012 The remission of duty is applicable for those goods which have ost 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. Hence if the goods have lost outside factory there is no issue of remission, in such case you have to pay central excise duty. Further if the goods have lost other than natural cause or avoidable accidents such as theft then also you have to pay. as regards scrap, once you have paid the duty there is no need to pay while clearing scrap of destroyed goods.

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CA Suresh Jain

CA Suresh Jain (Expert)
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08 September 2012 I agree with Mr. Laxman ishwarrao. Except to the extent as under :-

1. In this case the goods are rendered (I presume) unfit for use or damaged during the course of manufacture. The rejections etc are normal incidents during the process of manufacture. Since goods are being cleared as scrap central excise duty is payable. Remission is not applicable - refer 2007 (209) E.L.T. 477 (Tri. - Del.)

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