TaxTMI 
TaxTMI 
2015 (11) TMI 1343
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....procedure under the Central Excise law, on hourly basis, daily for all the 3 shifts. The statement of the Supervisor of Quality Assurance Department was recorded and also statement of Assistant Warehousing Manager, wherein it was accepted that they were drawing the samples of the products (chocolates) daily, shift wise, and the samples were for tests namely quality control, infestation, microbial, and for tasting. The samples for quality control and infestation are preserved for the period of one year and 3 months respectively and afterwards disposed off by way of burning. That the assessee had not paid duty on such samples. With reference to para 3.2.2 of Chapter 11 of CBEC Excise manual of supplementary instructions, it appeared that the assessee has failed to pay the duty and comply with the provisions as stated in the manual. The statement of various Officers was recorded wherein it is accepted that they were under the impression that since the goods are not leaving the premises, the duty need not be paid on such samples, used for in-house testing and that they were unable to adopt the practice based on the cost certificate, CAS 4 guidelines therefore the duty calculation....
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....ise duty or from observing the formalities for maintenance of accounts under the Central Excise law for the samples drawn and cleared to the In-house quality control laboratory for testing purposes. Moreover as per the instruction in supplementary manual the provisions of (1) samples drawn for in-house laboratory for testing quality and adherence to product specifications; (2) samples drawn for preservation for the investigation of complaints; (3) samples drawn for test at other concerns and independent testing agencies; (4) for samples required to be sent to Government Test Centres including the chemical examiner for test. So far as quantification of the duty in dispute is concerned for the samples cleared for in house testing purposes, the goods cleared as sample by the assessee have nor been cleared for sale outside the factory premises and not amounting to sale and therefore the violation of the same is to be seen as per Section 4 of Central Excise Act read with Rule 8 of Central Excise Valuation Rules 1975 and 2000 respectively as applicable and accordingly the assessee was required to show-cause as to why Central Excise duty amounting to Rs. 3,94,671.4/- plus education cess t....
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....efore the goods are not excisable. It was further urged that infestation samples and control samples were drawn after packing of the manufactured goods so that the samples could be identified for checking genuineness of complaint from the customer/Food and Drugs Adulteration administration. On the packing, batch number, manufacturing date/month and other relevant details were mentioned which was helpful in identification of sample in case of complaints. It was further urged that the three types of samples were not removed outside the factory but sent to Central Quality Control Laboratory situated within the factory premises and such samples got destroyed during the course of microbial testing and can not be marketed. Infestation samples are destroyed after 3 months by way of burning. There was no allegation in the show-cause notice about clearance of these type of samples to the market and no evidence has been adduced by department regarding clearance of infestation samples to the market. Therefore, not Excise duty is demandable on the goods which were destroyed and not sold in the market. It was further urged that as regards control samples, the shelf life was one year and control....
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....e notice and points out from para 4 of the notice, wherein it is recorded that the assessee had maintained registers for such samples. It is further recorded in the notice based on the statement of the supervisor quality assurance department that samples are drawn for testing the various parameters like infestation, quality control, etc. There is a specific procedure for drawing of samples and the particular quantities of samples are drawn as control samples and for various investigations. The samples drawn were in finished form and were retained for different periods from the date of drawl and disposed off by way of destruction. As regards the infestation samples these are also drawn from the manufacturing line and after testing these are preserved for a period of three months. After the period these are disposed of by way of destruction. It is further urged that from the perusal of the show-cause notice it is evident that the whole demand has been calculated on the basis of the record of samples drawn and maintained by the assessee. It is further urged that only for the absence of a column mentioning the date of destruction of the sample, no adverse inference can be drawn without....