2017 (2) TMI 937 - AT - Central Excise

Quality control samples - whether taxable or not? - Held that - duty on quality control samples cannot be demanded where the record of control samples is maintained - The appellants have been maintaining records of control samples - the duty is not chargeable on the control samples drawn by the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Duty on quality control samples

Analysis:
The case involved the appellant, engaged in manufacturing excisable goods, drawing quality control samples without paying duty. A show-cause notice was issued, and the demand was confirmed by the adjudicating authority and the Commissioner (Appeals). The appellant contended that duty on quality control samples had been settled by a Larger Bench judgment in the case of Dabur India Ltd. and cited various judgments supporting their position. The Revenue reiterated the findings of the impugned order.

The Tribunal considered the submissions and the judgments cited by the appellant, especially the Larger Bench judgment in the case of Dabur India Ltd. It was noted that duty on quality control samples cannot be demanded if records of control samples are maintained. In this case, the demand was based on the records of control samples maintained by the appellant, and the duty was quantified from these records. As the appellant had been maintaining records of control samples, the Tribunal found the Larger Bench judgment directly applicable. Consequently, the duty was held not chargeable on the control samples drawn by the appellant, and the impugned order was set aside, allowing the appeal.

The judgment was pronounced on 19/01/2017 by Mr. Ramesh Nair and Mr. Raju, Members of the Appellate Tribunal CESTAT MUMBAI. Ms. Anjali Hirawat appeared as the advocate for the appellant, while Shri V.K. Shashtri represented the Revenue as the Assistant Commissioner.