Marketability of physician samples remains intact despite sale prohibition, making them liable to central excise duty.

Physician samples remain marketable if they are capable of being bought and sold, even where the Drugs and Cosmetics Rules prohibit their sale and they are distributed free of cost. Marketability depends on the inherent ability of goods to enter trade, not on proof of actual sale. Because the samples were the same medicines as the regular commercial packs and differed only in size and labelling, they were treated as goods with marketable character. On that basis, physician samples were held liable to central excise duty.

---

---

Issues: Whether physician samples distributed free of cost, and prohibited from sale under the Drugs and Cosmetics Rules, are non-marketable and therefore not excisable.

Analysis: Marketability depends on whether the goods are capable of being bought and sold, not on whether they are in fact sold in the market. The prohibition in the Drugs and Cosmetics Rules against sale of physician samples does not alter the character of the goods when the samples are the same medicines as the regular commercial packs and are otherwise capable of being traded. The Court relied on the settled principle that marketability is a factual attribute of goods and that actual sale is not a necessary condition. The samples were held to be identical in substance to the regularly marketed products, differing only in size and labelling, and therefore not rendered non-marketable merely because their sale is prohibited.

Conclusion: Physician samples are marketable goods and are liable to central excise duty.

Ratio Decidendi: Goods remain marketable if they are capable of being bought and sold, even if their actual sale is prohibited by law or they are in fact distributed free of cost.

---