2000 (6) TMI 287 - AT - Central Excise

Summary

Issues Involved:
The appeal concerns whether taking and keeping samples of medicaments in the factory premises constitute removal of excisable goods under Rules 9 and 49 of the Central Excise Rules.

Details of the Judgment:

1. The Appellant, a pharmaceutical company, argued that the samples taken were for maintaining reference samples as required by Drugs & Cosmetics Rules, and these samples were used within the factory premises. The Additional Commissioner confirmed the duty demand, stating that the samples were not distinct from regular trade packing, thus deemed removed from the factory. The Commissioner (Appeals) upheld this decision.

2. The Appellant contended that as per Rule 74 of Drugs & Cosmetic Rules, maintaining reference samples is mandatory, and the samples are not marketable after expiry. They cited a case where no duty was payable as samples were not cleared from the factory. The Appellant argued that moving goods from the factory to the laboratory did not constitute removal under Rules 9 and 49.

3. The Respondent argued that drawing samples from manufactured goods constitutes removal under the Explanation to Rules 9 and 49. They referenced cases where benefits were denied due to samples not being distinctly packed. The Tribunal considered both arguments.

4. The Tribunal noted that the Appellants did not challenge that the samples were not distinctly packed, making them ineligible for exemption under Notification No. 171/70. Regarding removal of goods, the Explanation to Rules 9 and 49 deems goods consumed or utilized in the place of manufacture as removed. Drawing and retaining samples were considered utilization under the law.

5. The Tribunal disagreed with the Appellant's argument that the samples were not marketable after expiry, as the drugs were indeed marketable. Drawing and retaining samples were deemed removal under Rules 9 and 49, irrespective of marketability post-expiry. Thus, the appeal was rejected based on these findings.