Pre-RG-I medicine samples used for quality testing were not liable to central excise duty.

Medicines samples drawn during manufacture before the RG-I stage for quality control and batch testing were not treated as excisable goods, because they were taken only to verify whether the batch met required standards and could be marketed. Samples used solely for analysis before a batch was declared fit for sale were not regarded as fully finished goods cleared after manufacture. On that basis, the Tribunal held that such samples were not liable to central excise duty.

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Issues: Whether samples of medicines drawn during manufacture before the RG-I stage for quality control and batch testing are liable to central excise duty.

Analysis: The samples were drawn before the RG-I stage only for testing whether the medicines met the required quality standards. If a batch failed quality control, it was rejected and not marketed. Such samples, being used for analysis before the batch was declared fit for marketing, could not be treated as goods cleared after completion of manufacture in fully finished form. The Tribunal's earlier view on similar batch analysis samples supported this conclusion.

Conclusion: The samples were not liable to central excise duty.

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