2007 (7) TMI 145

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....ated that the appellants had to draw samples of the Bulk Drugs manufactured by them under the Drugs and Cosmetic Act even before the RG1 stage. The Revenue has proceeded to initiate the action on the appellants for demand of duty on the samples drawn. The Original Authority confirmed the demands. He imposed equal penalties under Section 11AC along with interest under Section 11AB of the Act. The Commissioner (Appeals) upheld the Order-in-Original. 3. The learned Consultant pointed out that the issue is squarely covered by several decisions of the Tribunal, particularly this Bench's decision rendered in the case of Commissioner of Central Excise, Hyderabad v. Gulf Oil Corporation Ltd. [2006 (201) E.L.T. 433 (Tri. - Bang.)] wherein it has ....

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....issioner of Customs & Central Excise (Appeals), Visakhapatnam. The Respondents are manufacturers of Bulk Drugs and Drug Intermediates which are excisable. It was noticed by the officers of Central Excise (P&I) that the Respondents stopped paying duty on samples drawn for testing purpose within the factory for the period from June, 2003 to September, 2003. It was felt that in terms of Paras 2.1 (ii), 3.2.1 (1) and 3.2.2 of Chapter 11 (samples) of Central Excise Manual, Vol-II, in respect of the samples drawn by in-house laboratory or testing quality and adherence to product specifications, the assessee is required to maintain a proper account of receipt and utilization of samples in the test. As the Respondents did not discharge the duty lia....

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....) has rightly followed the decision of the Tribunal and dropped the proceedings. Hence the Revenue's appeal, according to him, has no merits. 9. I have carefully gone through the records of the case and the submissions made by both the sides at the time of personal hearing. The Respondents are manufactures of Bulk Drugs. These drugs before being marketed should be sent for tests in terms of the provisions of Drugs and Cosmetics Act, 1945. In other words, the tests to be carried out are mandatory. When the samples are drawn and sent for such mandatory testing, a part of the samples may be destroyed and consumed in the course of testing. The samples which are returned to the manufacturer will be preserved for various purposes. In respect o....