Unserviceable stamps (i.e., those that are defectively manufactured, damaged, or spoiled), obsolete stamps, and unwanted surplus stocks of Postage Stamps and Postal Stationery, Revenue Stamps, Central Recruitment Fee Stamps, Defence or National Savings Certificates, and any other stamps that may be received by Post Offices shall be exchanged for serviceable ones of the same kind, belonging to the same department or the Postal Department, if necessary, from the Local or Branch Depots.
Damaged and obsolete Postage Stamps that can be counted and identified shall be sent quarterly to the Controller of Stamps, Nasik Road, for destruction. Necessary entries regarding the stamps sent shall be made in the plus and minus memoranda. Damaged adhesive stamps in loose labels shall be pasted onto sheets of paper to facilitate verification before transmission to the Controller. The destruction certificate must indicate the quantity and face value of the stamps destroyed.
At the beginning of each month, the Controller of Stamps shall provide the Civil Accountant General/Circle Postal Accounts Office with copies of the destruction certificates issued during the previous month to enable verification of the entries in the plus and minus memoranda. Postage stamps that are damaged beyond identification and cannot be checked by actual counting shall be disposed of according to the procedure laid down in Rule 52 B.
(Appendix 2, Part III under Rule 46 of Postal Financial Handbook Volume II)