Ottawa, September 8, 1989

Licensed brewers may take credit on revenue entries for the excise duty paid on beer that has been destroyed under prescribed conditions.

REFERENCES

Excise Act, section 174.
Brewery Regulations, section 4
Brewery Departmental Regulations, sections 3, 4, 5

INTERPRETATION

1. In this circular, "destroyed" means the rendering to an unreusable condition of beer by any process (exclusive of actual trade breakage or warehouse breakage).

REFUNDS ON DESTROYED BEER

2. Where beer has become unfit for use and is destroyed, a refund of any excise duty paid on beer so destroyed shall be made if documentary evidence is furnished to prove that the licensed brewer is entitled to a refund and that no previous refund has been allowed on that beer.

COMPLIANCE

3. Subject to the requirements of this circular, a licensed brewer may take credit by deduction or apply for refund of excise duties paid on beer that has become unfit for use and is destroyed under prescribed conditions, as defined in paragraphs 4 and 5 of this Circular, either on licensed premises or at an alternative location.

4. Where off-premises destruction is selected, the licensed brewer shall apply to the Regional Director, Excise, of the region where the destruction is to take place for approval therefor setting out:

(a) the proposed method of destruction,
(b) the proposed site(s) of assembly and destruction,
(c) the method of determining quantity,
(d) the nature of the records to be kept and documentation provided, and
(e) that the operation shall, at all times, be under the licensee’s control.

5. Where on-premises destruction is selected, the licensed brewer shall apply as in paragraph 4, except for item (b).

6. Only one application is required for whichever method of destruction is used. However, if the previously approved method of destruction changes, the brewer shall reapply to the Regional Director for approval.

7. Where a licensed brewer elects to use an off-premises location and contracts with an independent party to conduct the destruction operation, he shall state, in writing, the acceptance of responsibility for the actions of the independent party.

8. Where more than one licensee requests to use the same (common) site or equipment, the Regional Director may approve such arrangements, provided adequate safeguards and controls are present to ensure each licensee receives the appropriate credit.

9. Where approval is given by the region for a destruction operation that is to be used on a continual or recurring basis, a review and evaluation of the operational procedures, accounting procedures, and controls and related records and documents, shall be carried out as part of the surveillance program.

10. All off-premises destruction operations, subject to Excise supervision, and those on premises which take place outside authorized hours and which are supervised by Excise, are deemed to be special services, and subject to the charges specified therefor.

11. Where the beer to be destroyed has been manufactured by a licensed brewer other than the brewer performing the destruction, the brewer performing the destruction must be able to verify the identity of the manufacturer of the beer.

12. Where the products designated for destruction are returned from the trade or other external sources and the brewer is able to provide verification of quantities returned, in the form of credit notes (issued to external sources), bills of lading, and/or other independently produced documentation, the Regional Director may permit the brewer to destroy these goods without Excise supervision provided the conditions of paragraphs 4 and 5 have been met.

13. Where the products designated for destruction did not leave the licensed premises, but were in fact duty paid, the Regional Director may authorize such destruction without Excise supervision provided that the conditions of paragraphs 4 and 5 have been met.

14. Where duty paid products that have never left the licensed premises or where returns from external sources are designated for reprocessing and the brewer subsequently determines that they should be destroyed instead, the Regional Director may require such destruction to be supervised. In the absence of supervision, extreme care must be taken to ensure that a double (second) credit is not taken.

THIS CIRCULAR IS ISSUED UNDER THE AUTHORITY OF THE ASSISTANT DEPUTY MINISTER OF NATIONAL REVENUE, EXCISE, AS INFORMATION RELATING TO THE PROVISIONS OF THE EXCISE ACT AND REGULATIONS.