Manner of destruction :

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.

The officer supervising the destruction must endorse under his signature the relevant records/ documents such as AR-1, invoices and other relevant factory records indicating the description and quantity of the goods destroyed in his presence at which time and on which day.

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.

Where excisable goods are manufactured out of inputs on which Cenvat credit was availed, proportionate credit should be reversed before destruction of such goods. Proportionate credit should also be reversed in respect of inputs that are destroyed as such.

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 ` 5 lakhs in a case, the Commissioners will send a report to the Board giving sufficient details of such cases.

No remission of duty in case of theft should be allowed, since the goods are available for consumption somewhere. This Board‟s instruction is contrary to case laws decided.