Control sample exemption failed where packing was not distinct from trade packing, and differential duty demand was sustained.

Exemption under Notification No. 171/70 for control samples was conditional on packing distinct from normal trade packing. The samples were only marked as samples and not for sale, but were not packed differently from regular trade packing, so the exemption was unavailable. The plea that differential duty could not be demanded because the goods had not been cleared was rejected because it was raised only at the hearing and was inconsistent with the departmental record showing clearance on gate passes with duty paid. The demand of differential duty was therefore sustained.

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Issues: Whether the appellants were entitled to the benefit of Notification No. 171/70 dated 21-11-1970 for control samples when the condition requiring packing distinct from normal trade packing was not fulfilled, and whether the demand of differential duty could be sustained.

Analysis: The exemption claimed under the notification was conditional upon the samples being packed in a form distinctly different from the regular trade packing. The admitted factual position was that the control samples were not packed differently from the normal packing, apart from the marking that they were samples not to be sold. The plea that duty had been demanded on goods that had not been cleared was not accepted, as it was raised for the first time at the hearing and was inconsistent with the departmental record showing clearance on gate passes on payment of duty.

Conclusion: The appellants were not entitled to the exemption, and the demand of differential duty was upheld.

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