Distinct packing condition for physician samples must be met; mere labelling is insufficient, while Modvat credit may be verified.

An exemption notification requiring physician samples to be packed in a form distinctly different from regular trade packing, and separately marked, must be complied with cumulatively; mere labelling as "physician sample, not to be sold" does not satisfy the distinct-packing condition. The earlier Tribunal view on identical facts was followed, so the exemption was denied. Separately, Modvat credit of duty paid through PLA could be examined where the declarations were filed and coverage under the scheme was not rebutted; the credit claim was allowed subject to verification of eligibility and particulars.

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Issues: (i) whether physician's sample medicines were entitled to exemption under Notification No. 48/77-C.E. when the packing was not distinctly different from regular trade packing though marked as "physician sample, not to be sold"; and (ii) whether the assessee's request for Modvat credit of the duty paid through PLA was liable to be granted subject to verification.

Issue (i): whether physician's sample medicines were entitled to exemption under Notification No. 48/77-C.E. when the packing was not distinctly different from regular trade packing though marked as "physician sample, not to be sold".

Analysis: The exemption notification imposed cumulative conditions, including that the samples be packed in a form distinctly different from regular trade packing and that each smallest packing bear a clear marking. The marking alone was held insufficient because the requirement of distinct packing was a substantive condition and not a mere procedural formality. The earlier Tribunal decision on identical facts was applied as governing the present dispute.

Conclusion: The exemption was not available, and the finding was against the assessee.

Issue (ii): whether the assessee's request for Modvat credit of the duty paid through PLA was liable to be granted subject to verification.

Analysis: The assessee had filed the relevant Modvat declarations, and the claim that the goods were covered by the scheme had not been rebutted. The request was therefore considered capable of being examined by the department, subject to verification of eligibility and other particulars.

Conclusion: The request for Modvat credit was allowed subject to verification, in favour of the assessee.

Final Conclusion: The exemption claim failed, but the duty-paid credit claim was kept open for verification and consequential grant, leaving the assessee with only partial relief.

Ratio Decidendi: Where an exemption notification prescribes a distinct-packing condition in addition to a separate marking requirement, mere labeling does not amount to compliance and the condition cannot be treated as a minor procedural lapse.

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