2000 (11) TMI 408 - AT - Central Excise

Summary

Issues:
1. Availability of benefit under Notification No. 171/70-C.E. for samples of P or P Medicines.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi revolved around the question of whether M/s. Mapra Laboratories P. Ltd. could avail the benefit of Notification No. 171/70-C.E. for samples of P or P Medicines they manufactured. The appellants had requested to decide the appeal on merit based on written submissions and records available. The Respondent, represented by Dr. D.K. Verma, argued that the samples drawn for quality control purposes did not meet the conditions specified in the Notification. The Additional Commissioner and Commissioner (Appeals) had denied the exemption as the samples were not distinctively packed from the regular trade packing, a requirement under the Notification. The Appellants contended that the samples, although not distinct, were marked "Not for Sale" and were representative of the Medicament sold in the market as per the Drugs & Cosmetics Act. They further argued that retaining these samples within the factory did not constitute clearance for sale. The Respondent, however, argued that keeping the samples within the factory amounted to consumption or utilization of the goods, making them liable for central excise duty.

The Tribunal considered the arguments presented by both sides. It was established that the samples were not packed distinctly as required by the Notification. The conditions specified in the Notification mandated that the samples should be marked "Not for Sale" and packed differently from regular trade packs to avail the exemption. The Tribunal agreed with the Respondent that retaining the samples within the factory, in compliance with the Drugs & Cosmetics Act, would be deemed as clearance under Rules 9 & 49 of the Central Excise Rules. This meant that the P or P medicines, utilized as samples, would be subject to central excise duty. The Tribunal referred to previous decisions, including Aristo Pharmaceutical Ltd., where a similar conclusion was reached. The Tribunal distinguished the Benzal Pharma case, emphasizing that the utilization of excisable goods as samples within the factory constituted clearance, making them liable for duty. Based on this analysis and precedent, the Tribunal rejected the appeal, upholding the decision of the lower authorities.