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Issues:
1. Duty of excise on goods destroyed during quality control test 2. Duty on goods found short in stock 3. Duty on goods cleared as free samples Analysis: 1. Duty of excise on goods destroyed during quality control test: The Appellant argued that the quality control tests conducted on motor vehicle parts, resulting in goods being destroyed, were essential for marketability and not subject to excise duty until fully manufactured. Citing relevant cases, the Appellant contended that duty is not payable on goods destroyed during mandatory quality control tests. The Tribunal agreed, emphasizing that excisable goods must undergo tests before being considered fully manufactured. Therefore, duty is not leviable on goods destroyed during quality control tests, setting aside the duty demand. 2. Duty on goods found short in stock: The Appellant claimed that goods found short in stock were removed for reconditioning, citing SRP Hand Book guidelines allowing such actions without duty payment. However, the Departmental Representative argued that the shortage was admitted without evidence supporting reconditioning claims. The Tribunal upheld the duty demand, stating that in the absence of satisfactory explanation for missing goods, excise duty is payable on the shortfall. 3. Duty on goods cleared as free samples: Regarding duty on free samples cleared without payment, the Appellant believed no duty was leviable due to goods being non-marketable. However, the Departmental Representative contended that all manufactured goods are subject to duty upon removal. The Tribunal agreed, stating that excisable goods cannot be removed without duty payment. The Appellants were directed to discharge the duty liability on the free samples and pay a penalty of Rs. 15,000 for non-compliance. In conclusion, the Appeal was disposed of with the above decisions and penalties imposed accordingly.
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