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Home News Commentaries / Editorials Month 9 2007 2007 (9)
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Remission of Excise duty on destroyed or lost finished goods and Cenvat Credit

September 12, 2007
  • News

'Remission' means waiver or cancellation of excise duty payable.

As per Rule 21 of CE Rules, 2002 where it is shown to the satisfaction of the Commissioner that -

 Goods have been lost or destroyed by natural causes, or

 Goods have been lost or destroyed by unavoidable accident, or

  Goods 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, subject to such conditions as may be imposed by him by order in writing.

Earlier there were contrary views in respect of Cenvat provisions in case of remission of duty.  With the insertion of the sub rule 5C to the Rule 3 of the Cenvat Credit Rules, 2004, this controversy has been put to rest.

From now, it has been provided that, "Where on any goods manufactured or produced by an assessee, the payment of duty is ordered to be remitted under rule 21 of the Central Excise Rules, 2002, the CENVAT credit taken on the inputs used in the manufacture or production of said goods shall be reversed."

For more details please chapter no. 30 of Central Excise Practice Manual Published on this site.



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