2009 (9) TMI 441 - AT - Central Excise

Samples- dutiability- - The basic issue involved in this appeal of the Revenue is as to whether the sample of drugs drawn in the course of manufacture, before the RG I stage for quality control purposes, are liable for central excise duty. The Deptt. holding that such samples drawn during the periods from 2001-02 to 2002-03 are liable for Central Excise duty. However the Commissioner of Central Excise (Appeals) vide the impugned order-in-appeal dated 26-6-07 set aside the Asstt. Commissioner s Order. The Revenue is in appeal against this order of the Commissioner (Appeals). In the light of the various decisions held that- batch analysis samples used in testing are not liable to excise duty.

Summary

The appellate tribunal CESTAT, New Delhi, heard an appeal from the Revenue regarding whether samples of drugs drawn during the manufacturing process before the RG I stage for quality control purposes are liable for central excise duty. The Department claimed that such samples drawn between 2001-02 and 2002-03 were excisable and demanded duty, interest, and penalty from the respondent. The Commissioner of Central Excise (Appeals) set aside the Assistant Commissioner's order, leading to the Revenue's appeal. The Revenue argued that the samples were excisable and hence liable for duty, while the respondent's counsel contended that the samples were drawn before the RG-I stage and were used to test quality, making them non-excisable. The tribunal agreed with the respondent, citing previous judgments, and dismissed the Revenue's appeal, stating that batch analysis samples used for testing are not liable for excise duty. The impugned order was upheld, and the Revenue's appeal was rejected. The judgment was dictated and pronounced in open court.