Tribunal upholds duty and penalty for clearing samples without payment

The tribunal upheld the demand of duty and penalty under Section 11AC of the Central Excise Act, 1944 for clearing samples without payment of duty. The appellant's argument that unpacked samples were not excisable due to lack of packaging was rejected. The tribunal determined that even unpacked samples were subject to duty as they were still considered excisable goods. The appeal was dismissed, affirming the duty and penalty imposed for clearing samples without payment of duty.

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Issues:
- Appeal against demand of duty and penalty under Section 11AC of the Central Excise Act, 1944 for clearing samples without payment of duty.

Analysis:
The judgment pertains to an appeal filed against an order confirming a demand of duty and penalty under Section 11AC of the Central Excise Act, 1944 for clearing samples without payment of duty. The appellant, engaged in the manufacture of medicaments, cleared certain samples without duty payment between February 2000 and December 2002. The adjudicating authority upheld the demand and penalty. The appellant contended that the samples, being analytical samples cleared without packaging, were not excisable and hence the demand was unsustainable.

The tribunal noted that the samples were indeed cleared without duty payment, a fact not in dispute. The crucial issue was whether these unpacked samples were liable to duty. The tribunal held that even though the samples were cleared without packaging, they were still excisable goods and therefore subject to duty. The appellant's argument that the samples were not marketable due to lack of packaging was rejected. The tribunal highlighted that the tablets, which were dutiable, were cleared without payment of duty from the factory, as confirmed by the appellant's own submission in a letter dated 7.1.2003. Consequently, the tribunal found no error in the impugned order confirming the demand and penalty.

In conclusion, the tribunal dismissed the appeal, upholding the demand of duty and penalty under Section 11AC of the Central Excise Act, 1944 for clearing samples without payment of duty. The judgment emphasizes that the excisability of goods is not negated by the absence of packaging, and duty liability extends to such goods even when cleared in unpacked form.

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