2012 (7) TMI 833 - AT - Central Excise

Clearance of goods - Notification No. 48/77, dated 1-4-1977 - Violation of conditions of Notification - Held that - The notification is clear about the container containing contents. That does not speak of any design or colour of the container. Notification confines the test to be applied is whether it is distinctly different from the regular packing. This is not in dispute when the Authority found that there is quantity difference in the containers. Therefore, the first condition is fulfilled. Sofar as the condition of inscription is concerned, it is admitted case of both sides that appropriate inscription appeared. In the case cited by Revenue when there was a minor difference noticeable, Revenue succeeded therein. But this is a case where there is a major difference noticeable for that Revenue shall not gain out of the citations made - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of Notification No. 48/77 regarding clearance of Physician's samples.
2. Compliance with distinct packing and inscription requirements under the notification.
3. Dispute over similarity in packing design and color.
4. Comparison with precedent case of Indian Drugs & Pharmaceuticals Limited.
5. Decision on penalty imposed under Rule 173Q of Central Excise Rules, 1944.

Analysis:
1. The primary issue in this case revolved around the interpretation of Notification No. 48/77 concerning the clearance of Physician's samples. The appellant argued that the samples were cleared in accordance with the terms of the notification as they were in different packing and had individual inscriptions stating "Physicians samples - not to be sold."

2. The appellant contended that both the cumulative requirements of distinct packing and inscription in the individual container were fulfilled, seeking relief from the penalty imposed under Rule 173Q of Central Excise Rules, 1944. The argument was supported by the fact that the samples had different quantities packed and were marked as per the notification requirements.

3. However, the Revenue opposed the appellant's claim, arguing that the packing with the same monograms, color, and design did not qualify for the benefits of the notification. The authorities below upheld this view, citing the decision in the case of Indian Drugs & Pharmaceuticals Limited, Hyderabad v. CCE, Hyderabad, where minor differences were not considered sufficient for exemption.

4. The Tribunal, after examining the facts and the notification requirements, found that the containers with different quantities and marked as "Physician sample - not to be sold" fulfilled the distinct packing condition. The Tribunal emphasized that the notification did not specify design or color requirements for the container, focusing on the differentiation from regular packing.

5. In light of the substantial differences observed in the containers and the compliance with the inscription requirement, the Tribunal set aside the first appellate order and allowed the appeal in favor of the appellant. The decision highlighted the significant distinction in this case compared to the precedent cited by the Revenue, where minor differences were insufficient for a favorable outcome.

This detailed analysis of the judgment provides a comprehensive understanding of the issues addressed, arguments presented, and the Tribunal's decision in the case.