1999 (5) TMI 403 - AT - Central Excise

Summary

Issues involved:
1. Compliance with conditions of Notification No. 171/70-C.E.
2. Time-barred demand for the period 1-4-87 to March 1991.

Compliance with conditions of Notification No. 171/70-C.E.:
The appeal was filed against the Order-in-Original dated 26-3-93 by the Collector of Central Excise, Bombay-II. The appellant, engaged in manufacturing P & P Medicines, claimed exemption under Notification No. 171/70 for control samples of P & P Medicaments. The Collector confirmed the demand, stating that the samples were not distinctly different from the regular trade packing, imposing a penalty under Central Excise Rules. The appellant argued compliance with the notification conditions as the packing clearly indicated "control sample - not for sale." Additionally, reference was made to Rule 78(m) of the Drugs & Cosmetics Act mandating maintaining reference samples. The appellant contended that the demand was time-barred, citing the approval of classification lists and daily production reports as evidence of compliance. The Senior Departmental Representative argued non-compliance with distinct packing requirements and suppression of drawal, packing, and preserving methods of control samples, justifying the extended period of limitation.

Time-barred demand for the period 1-4-87 to March 1991:
The appellant claimed that the demand was time-barred, referring to the issuance of the show cause notice on 27-3-92 for the period 1-4-87 to March 1991, with classification list approval on 23-12-87. Citing the decision in Indian Drugs & Pharmaceuticals Limited v. Commissioner of Central Excise, the appellant argued against clandestine removal, suppression, or misstatement of facts. The Tribunal's decision highlighted that no suppression or misstatement was proven, and the demand was time-barred due to the absence of clandestine activities. The Tribunal emphasized the lack of expectation for detailed information in classification lists, supporting the appellant's position. Ultimately, the Tribunal found the demand time-barred, setting aside the impugned order and allowing the appeal. However, the President, in a contrasting opinion, emphasized the necessity of distinctly distinguishable packing, rejecting the appeal due to insufficient evidence of compliance with notification conditions and time-barred demand.

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