TaxTMI 
TaxTMI 
2024 (8) TMI 1274
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....ted 25.04.2018 4. ST/61751/2018 OIA No.CHD-EXCUS-001-APP-152-2018- 19 dated 17.07.2018 5. ST/61996/2018 OIA No.CHD-EXCUS-001-APP-182-2018- 19 dated 20.09.2018 6. ST/60011/2020 OIA No.CHD-EXCUS-001-APP-152-2019- 20 dated 10.10.2019 2. Brief facts of the case are that the appellants are engaged in the manufacture of medicaments, injections and capsules; the appellants retain certain samples in pursuant of Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945 for the purpose of testing; the appellants also retain certain samples for control purposes. On conduct of an audit, Revenue was of the opinion that the appellants have failed to discharge applicable duty on the samples drawn for internal testing and control purposes. Show Cause Notices were issued periodically and were confirmed/ upheld by the above cited orders. Hence, these appeals. 3. Ms. Krati Singh, assisted by Ms. Shreya Khunteta, learned Counsels for the appellant, submits that drawing of samples for in-house testing involves small quantities of unlabeled solutions at the stage of processing; such drawl of samples, as per the statutory provisions contained in Drugs and Cosmetic....
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....2002 (12) TMI 85 - Supreme Court Alkem Laboratories Ltd. Versus C.C.E. & S.T. Daman 2022 (10) TMI 797 - CESTAT Ahmedabad JK. Industries Ltd . Versus Commissioner Of C. EX., Jaipur-II 2003 (6) TMI 66 - CESTAT, New Delhi Thermax Culligan Water Technologies Ltd. vs. Commr. OF C. E., Belapur, 2013 (12) TMI 977 - CESTAT Mumbai DR. Reddy's Laboratories Ltd. Versus Commr. Of C. Ex., Visakhapatnam 2007 (7) TMI 145 - CESTAT, Bangalore 5. Learned Counsel for the appellants further submits that the allegation of the Department that the appellants are following the procedure prescribed under Para 3.2 of the Supplementary Instructions is not correct; the said instructions are in respect of fully manufactured excisable goods and are not applicable to the samples which are drawn before the goods have become marketable; in terms of Para 3.3.1 of the Instructions, no duty is leviable on the samples until they are cleared from the factory; in the instant case, the samples have never left the factory and therefore, there is no requirement for an invoice under Rule 11 of Central Excise Rules, 2002. She submits without prejudice to the above the allegation tha....
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.... to pay appropriate excise duty. 9. Heard both sides and perused the records of the case. The case of the Department is that the appellants have not maintained proper records to account for the samples drawn for internal testing purposes and for control purposes and as such in terms of the Supplementary Instructions and as per the Hon'ble Apex Court's decision in the case of ITC Ltd. (supra), the appellants are liable to pay duty on the samples removed by them. The appellants, on the other hand, contend that the samples have not achieved the stage of manufactured products and hence, cannot be accounted for in the RG-1 Register; since they have not been cleared from the factory, no excised duty is payable as per the ratio of the various judgments relied upon by them. We find that the Revenue argues strongly on the point that the appellants have not maintained any records. We find that as far as the control samples are concerned, learned Counsel shows us copies of Excise Returns wherein the destruction of control samples is recorded; moreover, the learned Adjudicating Authority himself has dropped the demand in respect of the control samples, relying on the judgment of the Larger ....
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....destroyed during the course of testing. 11. We further find that Hon'ble Bombay High Court in the case of RPG Lifesciences Ltd. (supra) held that: 4. In the present case, the specific case of the assessee is that samples drawn for testing were not cleared out of the factory but were cleared within the factory for testing and that the said samples were consumed in the process of testing. These facts have not been controverted by the revenue. It is not the case of the revenue that the assessee has failed to maintain the books/accounts as required under the Rules relating to the samples drawn for testing. Where the goods are not cleared out of the factory premises but were drawn for testing within the factory and in fact were consumed within the factory during the process of testing, the question of demanding any duty on those samples does not arise. We draw support for this view from the decision of the Apex Court in the case of ITC Ltd. v. Collector of Central Excise, Patna reported in 2003 (151) E.L.T. 246 (S.C.), particularly para 11 thereof. 5. Decision of the Tribunal in the case of Positive Packaging Industries Ltd. (supra) relied upon by the counsel for th....