Distinct packing requirement for physician's samples controls exemption; mere labelling alone is not enough under the notification.

The commentary notes that the classification of Wokadine Surgical Scrub had already been decided in the assessee's own case, and that earlier ruling was treated as continuing because no Supreme Court stay had been granted. It also explains that physician's samples can qualify for exemption only when they are intended for free supply, clearly marked as samples, and packed in a form distinctly different from regular trade packing. On the stated facts, mere labelling was insufficient because the record did not show distinct sample packing, so the exemption was considered unavailable.

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Issues: (i) Whether the classification of "Wokadine Surgical Scrub" stood settled in favour of the assessee; (ii) Whether physician's samples cleared by the respondent satisfied the conditions for exemption under Notification No. 48/77-C.E., dated 1-4-1977, particularly the requirement of packing distinctly different from regular trade packing.

Issue (i): Whether the classification of "Wokadine Surgical Scrub" stood settled in favour of the assessee.

Analysis: The classification issue had already been decided by the Tribunal in the assessee's own case. No stay had been granted by the Supreme Court against that decision. In those circumstances, the earlier classification ruling was treated as operating and the departmental challenge on this point did not survive.

Conclusion: The classification of "Wokadine Surgical Scrub" was upheld in favour of the assessee.

Issue (ii): Whether physician's samples cleared by the respondent satisfied the conditions for exemption under Notification No. 48/77-C.E., dated 1-4-1977, particularly the requirement of packing distinctly different from regular trade packing.

Analysis: The notification exempted physician's samples only if they were intended for free supply, packed in a form distinctly different from regular trade packing, and clearly marked as physician's samples not to be sold. Although the samples were marked accordingly and were distributed free, the record did not show that their packing was distinctly different from the regular trade packing. Mere printing of the cautionary words was not enough to satisfy the separate packing condition. The exemption, therefore, was wrongly granted.

Conclusion: The exemption under Notification No. 48/77-C.E. was not available, and the order allowing it was set aside.

Final Conclusion: The appeal succeeded on the exemption issue but failed on the classification issue, resulting in partial relief to the Revenue.

Ratio Decidendi: Where an exemption notification prescribes a distinct packing condition for physician's samples, mere labelling is insufficient unless the packing itself is demonstrably different from regular trade packing.

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