2000 (6) TMI 287

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Rules 9 and 49 of the Central Excise Rules. 2. Shri S.S. Gupta, learned Chartered Accountant, submitted that the appellants manufacture P or P medicaments classifiable under Chapter 30 of the Schedule to the Central Excise Tariff Act; that under the provisions of Drugs & Cosmetics Rules, they have to maintain reference samples from each batch of the drugs and these samples are required to be retained till expiry of drugs and 3 months thereafter; that the Additional Commissioner, under Adjudication order Nos. 162-167/96, dated 24-10-1996 confirmed the demand of excise duly on the quantity of P or P medicament taken as reference sample holding that exemption from payment of duty on such quantity under Notification No. 171/70-C.E., da....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ert the claim that samples were not retained but were cleared from the factory, there was no clearance from the Appellants' factory and accordingly no duty was payable. The learned Chartered Accountant emphasised that removal of goods from factory area to laboratory did not amount to removal as contemplated under Rules 9 and 49; that the Explanation to Rule 9 clearly provides that excisable goods produced in any plant should be consumed or utilised as such in further process; that the medicaments retained as control sample is retained as it is; that as such even after the Explanation under Rule 9, the same will not amount to removal of goods. 4. Countering the arguments, Shri H.K. Jain, learned SDR, submitted that as the Appellants ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ll be removed from any place where they are manufactured, until the excise duty leviable thereon has been paid. Explanation to Rule 9 provides as under : "Explanation - For the purpose of this rule, excisable goods produced, cured or manufactured in any place and consumed or utilised - (i) as such or after subjection to any process or processes; or (ii) for the manufacture of any other commodity; Whether in a continuous process or otherwise, in such place or any premises appurtenant thereto, specified by the Commissioner under sub-rule (1), shall be deemed to have been removed from such place or premises immediately before such consumption or utilisation." A similar Explanation finds place in Rule 49 of the Central Excise Rul....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of the article, albeit that article retaining its identity even after use". The Supreme Court also in the case of Kathiawar Industries Ltd. v. Jaffrabad Municipality, AIR 1979 SC 1721 considered the scope of the words 'consumption' vis-a-vis 'use' and held that the precise meaning to be given to these words would depend upon the context in which they are used. "The word consumption in its primary sense means the act of consuming and in ordinary parlance means the use of an article in a way which destroys, wastes or uses up that article. But in some legal contexts, the word 'consumption' has a wider meaning. It is not necessary that by the act of consumption the commodity must be destroyed or used up. The word 'use' is of wider import than ....