2005 (8) TMI 252 - AT - Central Excise

Summary

Issues:
1. Liability to pay duty on cigarettes samples removed for testing without payment during specific periods.
2. Discrepancy in maintaining accounts of samples drawn for testing purposes.
3. Imposition of penalty and interest on duty payable for destroyed samples.

Analysis:

1. The issue revolves around the liability to pay duty on cigarettes samples removed for testing without payment during specific periods. The appellant argued that the samples drawn for testing were duly accounted for and destroyed, hence no duty was payable. The lower authorities, however, held that duty was chargeable on such samples as per relevant notifications and circulars. The Commissioner of Appeals dismissed the appeals, leading to the present appeal.

2. The discrepancy in maintaining accounts of samples drawn for testing purposes is a crucial aspect of the case. The appellant contended that they maintained proper accounts, which were verified and authenticated by the Department for the preceding period. The Hon'ble Supreme Court's judgment emphasized the importance of maintaining accurate records for samples destroyed during testing. The appellant's compliance with maintaining accounts was a key argument against the imposition of duty, penalty, and interest.

3. The imposition of penalty and interest on duty payable for destroyed samples was also contested. The appellant argued that no penalty should be imposed as they acted bona fide and in accordance with legal precedents. They further highlighted that interest under Sections 11AA and 11AB was not applicable due to timely deposit of duty under protest. The appellant's argument centered on the absence of any liability to pay duty on destroyed samples, which negated the need for penalty or interest.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. The judgment emphasized the significance of maintaining accurate accounts for samples drawn for testing purposes to determine the liability for duty payment. The decision highlighted the binding nature of the Hon'ble Supreme Court's judgment on duty payable for destroyed samples, leading to the dismissal of penalty and interest claims.