Excise duty on samples arises only on removal from the factory, not on mere drawal or in-house testing.

Excise duty on samples is attracted only when the samples are removed from the factory; mere drawal of samples or in-house testing within the manufacturing premises does not amount to removal and does not by itself trigger duty. Samples retained inside the factory, or consumed during testing there, are not treated as goods cleared from the factory, and duty liability arises only on actual removal outside the premises.

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Issues: Whether samples drawn and retained within the factory, or tested within the factory premises, attract excise duty, and whether duty becomes payable only when samples are removed from the factory.

Analysis: The instructions relied upon in the case distinguish between different categories of samples and expressly contemplate payment of duty before removal for test purposes. The decision turns on the distinction between drawal of samples and removal of samples. Samples retained in the factory or consumed during in-house testing are not treated as goods removed from the factory, and there is no basis to impose duty at that stage. Duty liability arises when samples are actually removed outside the factory premises. The authority also noted that the cost of such samples is ordinarily absorbed in the cost of production of the final goods.

Conclusion: Samples retained in the factory or tested within the factory are not liable to excise duty merely on drawal; duty is payable only on removal from the factory.

Ratio Decidendi: Excise duty on samples is attracted only upon removal from the factory, not upon mere drawal or in-factory testing of samples retained within the manufacturing premises.

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