2013 (1) TMI 302 - AT - Central Excise

Whether assessee are liable to pay duty on samples which were used in-house for testing - Held that - Following the decision in case of RPG Life Sciences Ltd (2010 (12) TMI 52 - BOMBAY HIGH COURT) that on control samples for testing, which were not cleared from the factory no duty is payable. Therefore, samples retained by the appellants for in-house testing, they are not liable to pay duty. In favour of assessee

Summary

Issues involved:
Duty demand on samples retained for in-house testing

Analysis:

The Appellate Tribunal CESTAT CHENNAI considered three appeals with a common issue regarding duty demand on samples retained by the appellants for in-house testing. The Department contended that duty should be paid on these samples used for testing, as they were manufactured. However, the Tribunal referred to a judgment by the Hon'ble High Court of Mumbai in a similar case, where it was held that duty is not payable on control samples for testing that were not cleared from the factory. The Tribunal noted the clarification in the CBEC Manual but emphasized being bound by the High Court's judgment. Consequently, the Tribunal ruled that the appellants are not liable to pay duty on the samples retained for in-house testing, and no penalty is leviable as well.

In conclusion, the Tribunal disposed of the appeals based on the judgment of the High Court, stating that the samples retained by the appellants for in-house testing do not attract duty payment. The decision was made with reference to the legal precedent and observations, providing consequential relief to the appellants.