Test samples destroyed in testing are not excisable when they lose marketability, despite exemption rescission.

Tyres and tubes drawn as test samples were held not liable to excise because the unchallenged finding was that testing had worn them out and destroyed their marketability. The rescission of the exemption notification did not alter the position, as excise duty cannot be levied on goods that have no surviving commercial existence after testing. The cited precedent on samples consumed or reduced to scrap in testing supported the same result, so the Revenue's challenge failed.

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Issues: Whether tyres and tubes drawn for test purposes, which were found to be destroyed in testing, were liable to duty of excise after rescission of Notification No. 57/88-C.E.

Analysis: The exemption notification relied upon by the assessee had been rescinded, but the decisive question was whether the test samples had any surviving marketability or commercial existence after the stress, torture, friction and speed tests. The finding that the goods were worn out and destroyed in the tests was not challenged. In such circumstances, the absence of marketability meant that duty of excise could not be levied on the samples. The cited precedent on samples consumed or rendered scrap in testing supported the same conclusion.

Conclusion: The samples were not liable to duty of excise and the Revenue's challenge failed.

Ratio Decidendi: Goods drawn for test purposes are not dutiable where the unchallenged finding is that they are destroyed in testing and have no marketability.

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