SAMPLES - CBEC Manual (OLD) - Central Excise

CHAPTER 11 SAMPLES 1. Introduction 1.1 There is no specific provision in Central Excise Rules, 2002 referred to as the 'said Rules') governing drawl and testing of 'samples' of manufactured goods or inputs to ascertain their correct identity or classification or eligibility of any exemption. However, under various procedures, such as relating to exports, assessment etc. drawl of samples is required. 2. Categorization of samples 2.1 The samples can be categorized, as follows: (i) Trade samples sent to customers for trial; or trade samples for free distribution to public/ultimate consumer; (ii)Samples for test purposes; (iii) Samples for supply against sale contracts or for enforcement of control measures; (iv) Samples for display at exhibitions, fairs and in show-cases; and Samples for market inquiries by Central Excise Officers. 2.2Apart from the assessee requiring the samples for cogent reasons, the Central Excise Department may also require drawl and testing of samples and the asseessee shall comply with such directions as may be given in this regard. However, there shall not be any drawl and testing of samples in routine manner. 3. Procedure for the drawl and accounting of Samples 3.1 Trade Samples 3.1.1 The manufacturers' generally give such samples to their customers for 'trial and approval'. Trade samples may also be distributed free to public/ ultimate consumer. The removal shall be in the same manner as the removal of goods for home consumption. The manufacturer shall prepare an invoice under rule 11 of the said Rules and record the details in his Daily Stock Account. He shall discharge duty in the manner specified in rule 8 of the said Rules unless the removal of samples are exempted from duty by a notification issued under Section5A of the Central Excise Act, 1944. 3.1.2 Samples of certain goods sent to the trade by manufacturers are to be returned. In such cases, the procedure specified in rule 16 of the said rules and the instructions relating thereto shall be followed. 3.2 Samples for test purposes 3.2.1 The samples of this category will generally include:- (i) Samples drawn by in-house laboratory for testing quality and adherence to product specifications; (ii) Samples drawn for preservation for investigation of complaints; (iii) Samples drawn for test at other concerns and independent testing agencies; (iv) Samples required to be sent to Revenue Laboratories (Chemical Examiners) including Government Test centers. 3.2.2 The assessee is required to maintain a proper account of receipts and the utilisation of samples in the test, in the laboratory. The removal shall be in the same manner as the goods are removed for home consumption. The manufacturer shall prepare invoice under rule 11 the said Rules and make issue entries for the goods (samples) in the Daily Stock Account. Appropriate duty shall be paid by the assessee on these samples before their removal for test purposes unless otherwise exempted by a duty exemption notification. 3.3 Samples for other purposes 3.3.1 Where samples are required for the purposes specified at (iii), (iv) and (v) of paragraph 2.1 above, the procedure specified at paragraph 3.2 shall be followed. However, it is clarified that when a manufacturer preserves the samples of their product for some period for investigation of complaints, if any, no duty should be charged on these samples considering that the goods remain within the factory. Duty shall be charged, unless exempted by a notification, once the samples are cleared from the factory. If at any time the manufacturer desires to destroy these samples, procedure specified in rule 21 of the said Rules shall be followed. 4. Quantity of samples 4.1 The quantity of the samples should be drawn are indicated in Annexure i in the Central Excise Manual of Chemical laboratories in the Custom Houses published by Directorate of Publications, Customs and Central Excise, New Delhi 1983, which is reproduced below. S. No. Description of Goods Minimum quantity of samples required for test in the laboratory 1 Sugar and Sugarhouse Products 250gms. 2 Confectionery Chocolates 300gms 3 Prepared food Products 500gms. Preferably in original packing 4 Coffee 125gms S No. Description of goods Minimum quantity of samples required for test in the laboratory 5 Tea 125gms 6 Tobacco 100gms 7 Mineral Oil (Motor Spirit H.S.D.etc.) 1Litre 8 Kerosene 1Litre 9 Refined Diesel Oil N.O.S./ other Mineral Oil 1Litre 10 Diesel Oil N.O.S./other Mineral Oil 1Litre 11 Furnace Oil 1Litre 12 Asphalt Bitumen Tar 500gms 13 Products derived from refining of crude petroleum or not otherwise specified (a) Lubricating Oil 1Litre (b) Grases, Waxes 500gms (c) Mineral Turpentine Oil 1Litre (d) Transformer Oil 4Litre (e) Other(i)In liquid form 1 Liter (ii)Semi-Solid or Solid in form 250gms 14 (i) Blended of compounded lubricating Oils 1Litre (ii) Blended or compounded greases 500gms 15 Calcined petroleum coke etc. 250gms 16 Vegetable products 250gms 17 Vegetable Oils 250gms 18 Paints, Enamels, Varnishes, Lacquers etc. 500gms 19 Soda Ash 250gms 20 Soap 250gms 21 (i) Synthetic organic products of a king used as I)Organic Luminophores 50gms (ii) Products of the kind known as optical Bleaching Agents, Substantive to the Fibre. 250gms 22 Organic surface-Active (other-than soap); surface-Active preparations and washing preparations, whether or not containing soap. 250gms S No. Description of goods Minimum quantity of samples required for test in the laboratory 23 Caustic Soda 250gms 24 Soduum Silicate 500gms 25 Glycerine 250gms 26 Dyes/pigments 250gms 27 Medicines 200gms Or/100 Tablets/Capsules 28 Cosmetics Toilets preparations Original packing of abut 250gms 29 Acids 250ml 30 Fertilisers 250gms 31 (i) Plastics 100gms. If solid, 250ml. If liquid (ii) Synthetic Resins 250gms 32 (a) Rubber products 250gms (b) Rubberised fabrics 1/2metre long of full width 33 Plywood and flush doors 1/2sq metre 34 Paper, board etc. 10 sheets (approx. 30 cm. x 20 cm.) 35 Rayon Synthetic yarn 500metres or full hank, as the case may be 36 Cotton Twist yarn thread 1000 metres (one hank) 37 Wool tops 100gms 38 Woolen yarn 200 metres 39 Cotton fabrics One metre full width 40 Woolen fabrics ½ metre full width 41 Rayon or Art Silk Fabric 1metre full width 42 Varnished cloth leather cloth 1metre full width 43 Cement all varieties 500gms 44 Glass Glassware The two whole articles if possible. If the articles is too bulky 250gms. In weight of representative portion of the articles. 45 Chinaware Porcelainware -do- 46 Asbestos Cement products 500gms S No. Description of goods Minimum quantity of samples required for test in the laboratory 47 Copper Copper Alloys 100gms 48 Iron or Steel products 250gms 49 Wires Cables 5metres 50 Footwear 1pair 51 Metals Alloys 250gms However, in some cases a specific quantity is asked for which should be supported by requisition order from the Chemical Examiner. An account of all departmental samples drawn and sent to the Chemical Examiner should be maintained by the Range Officer. 5. Test Memo 5.1 A test memo should always be prepared in triplicate, the original to be sent to the Chemical Examiner, triplicate to the Deputy/Assistant Commissioner and duplicate retained on the Range Officer's record. 6. Preservation of Samples 6.1 The samples drawn by the Range staff but not sent for test to laboratories should be preserved for six months from the date of analytical report on the sample tested. In case of any discrepancy being noticed, the samples have to be preserved till the period of Appeal or Revision application is over or till disposal of Appeal/Revision Application. The remnants, which are not required by the concerned assessee, may be destroyed soon after the parties specially inform that they accept the analytical report furnished by the Director (Revenue Laboratories) or after completion of the period of appeal or revision petition is over, as the case may be. 7. Cost of samples when drawn by the Department 7.1 In respect of samples drawn by the officers of the Central Excise Department for ascertaining the identity of goods/its classification or any other official purposes relating to Central Excise, the cost of samples may be reimbursed on manufacturer's request out of the contingency by the divisional officer. The cost of the containers required for drawl of samples may not be much and if the same cannot be borne by the assessee through persuasion the same should be borne by the Department. 8. Procedure for testing and re-testing of samples drawn by the Department 8.1 Except where there are special instructions for particular kind of samples, the representative samples from such or any lot must be drawn in the presence of the owner/manager of the factory or his representative. 8.2 The quantities of excisable goods or materials taken for testing should necessary for testing and the Commissioner will, in consultation with the Chemical Examiner concerned, specify for each kind of excisable goods e size of samples for this purpose. 8.3 The samples should be sealed with Excise seals and a declaration obtained from the owners (manufacturers) to the effect that the samples drawn are representative of the lot and that he is satisfied with the manner of drawing of the sample. The assessee, if he so desires, may also be permitted to affix his seal on the samples. 8.4 The four samples drawn for test should be clearly marked as: (a) Original for Chemical Examiner (to be despatched to him along with the declaration and the relative test memorandum under intimation to the Assistant/Deputy Commissioner concerned). (b) Duplicate to be sent to the Deputy/Assistant Commissioner of Central Excise (to be forwarded to him for safe custody for further use in case a dispute arises). (c) Triplicate for Range Officer (to be retained for any future reference or to cover loss by post or other emergency). (d) Quadruplicate to be given to the manufacturer (for his own record). 8.5 Before despatch of sample to the Deputy/Assistant Commissioner of Central Excise and the Chemical Examiner, the samples should be packed properly, sealed and marked in such a way that they suffer no loss or deterioration in transit or subsequent storage. 8.6 The Chemical Examiner after test, will return the remnant sample, if fit for re-test and not in other cases, together with his test report, to the Assistant Commissioner concerned. The Chemical Examiner will be in position to indicate whether or not a remnant is fit for re-test and the Deputy/Assistant Commissioner of Central Excise or other adjudicating authority will in most cases be able to anticipate whether the assessee will demand a re-test or not. The test should be speedily communicated to the Assessee. 8.7 The Department shall carefully preserve the remnant sample. 8.8 Whenever the assessee is dissatisfied with the test carried out by Chemical Examiner he can apply to Deputy./Assistant Commissioner of Central Excise concerned for re-test within 90 days from the date on which the test result was communicated to him after payment of the prescribed fees. The prescribed fee for re—testing of the samples in the laboratories of Central Board of Excise and customs have been prescribed in Appendix A of the Central Manual of Chemical laboratories in the Custom Houses containing procedure, rules and regulations by Directorate of Publication, Customs and Central Excise, New Delhi 1983 as which is reproduced below: Schedu1e of fees for testing and re-testing sample in the laboratories of the Central Board of Excise Customs SCHEDULE I FEE Rs.50/- PER SAMPLE 1 Dangerous Petroleum for Certificate G. The petroleum Rules, 1937 SCHEDULE II FEE Rs.60/- PER SAMPLE 1 Asphalt 11 Miscellaneous(qualitative) 2 Chemicals drugs other than prohibited drugs; tests for B.p. Standards etc. (qualitative) 12 Opium(qualitative) 3 Cocaine 13 Press cake or baggasse (sugar percent) 4 Denatured Spirit (qualitative) per sample 14 Paper (fibre count) 5 Dyes(qualitative) 15 Potable spirits for obscuration 6 Gauging 16 Sackings and Hessians 7 Gold and Silver articles (qualitative) 17 Spent dye (for salt content) 8 Greases(for pour points) 18 Spirituous preparations (alcoholic strength) (a) essences,(b) Medical preparations (c) toilet preparations and (d) wines, corlials 9 Jute, hemp and other vegetable fibres (identification) 19 Starch, flour, rice, and other cereals, identification of 10 Metals (qualitative) 20 Textiles and yarn (qualitative) SCHEDULE III FEE Rs. 150/- PER SAMPLE 1 Chemicals; drugs other than prohibited drugs tests for B.P Standards etc. (qualitative) 26 Oils, Minerals, e.g., petrol, kerosene, diesel etc. including those tested to ascertain if they are suitable for use as an illuminant in wick lamp. 2 Condensed steam and sugar factory effiuents. 27 Oils other than specified under essentials oils and fats, waxes, fatty acids, stearing, tallow etc. 3 Dangerous petroleum in mixtures and toilet preparations 28 Opium, estimation of morphine. 4 Denaturants 29 Ores (qualitative) 5 Denatured Spirits(qualitative) 30 Paints , varnishes and lacquers 6 Distillary sample 31 Paper(volumetric) 7 Dye (qualitative) 32 Perfumed spirit-analysed to determine if perfumed spirit 8 Explosives 33 Pigments 9 Fermented liquors (bear, tari etc.) determination of original gravity, physical constants etc. 34 Pitch and Tar 10 Gold and silver articles (qualitative) 35 Power alcohol , denatured or undenatured 11 Greases (complete analysis)and petroleum jelly 36 Rectified spirit, denatured or undenatured 12 Gums, glus, gelatine. Resins natural and synthetic and related substances. 37 Restricted and prohibited drugs, detection as such estimation of in medicines etc. 13 Gur and gur drainings. 38 Salt in country soaps 14 Hemp drugs 39 Soaps (general and qualitative) 15 Instruments standardization of 40 Sugar candy and candy syrups 16 Licit and illicit spirits 41 Sugar confectionery products 17 Massacuite 42 Sugar of all kinds not otherwise specified 18 Matches and fires works 43 Syrup (complete chemicals analysis) 19 Medicinal preparations (medicated wines complete analysis) 44 Tea 20 Metals, determination of one or two constituents 45 Textiles and yarns (quantitative) 21 Methylated liniments and tinctures. 46 Toilets preparations 22 Milk and milk powders (quantitative) 47 Turpentine and turpentine substitute 23 Molasses 48 Water analysis 24 Motor Spirits. 49 Samples not otherwise specified, involving determination of not more than two constituents or constants or which involve a qualitative analysis and determination of one constituent or constant 25 Oils ((lubricating and batching, linseed and other paint oils other vegetables oils.) SCHEDULE IV FEE Rs. 250/- PER SAMPLE 1 Butter 10 Saline earths 2 Cement, clays, bleaching earth, sand, stone powers, infusorial earth and related substances 11 Salt, Sitta, refinery salt (complete quantitative analysis) 3 Essential oils 12 Saltpotre 4 Ghee 13 Trade and patent products imported under fancy names for chemical composition 5 Lemon and lime juice for ships provisions etc. 14 Vegetable oils 6 Manures (quantitative) 15 Vegetable products, ghee etc. 7 Metals and metallic alloys, determination of three or more constituents. 16 Flours 8 Mineral oils for railways 17 Samples not otherwise specified, involving determination of more than two constituents or constants or which involve a qualitative analysis and determination of more than one constituent or constant. 9 Ores (quantitative) 8.9 Where the remnant sample is available in sufficient quantity in its original state, re-test should ordinarily be on such remnant sample. Where such remnant sample was received from the Chemical Examiner but it is not in sufficient quantity or in original state, or where the party concerned desires, for one or the other reasons, a re-test on duplicate or triplicate sample, Deputy/Assistant Commissioner of Central Excise, the adjudicating authority or, as the case may be, the appellate authority should pass an appropriate order for re-test on duplicate or triplicate sample. 8.10 Where an assessee requests for re-test in a laboratory other than a Control Laboratory (hereinafter in this paragraph referred to as "outside laboratory") whether on the remnant or the duplicate or triplicate sample, such request may be allowed for testing the sample from an outside Government or Semi-Government laboratory with the prior permission of the Commissioner or the Appellate or the Reversionary authority, as the case may be after Director (Revenue Laboratories) has confirmed that the departmental laboratories do not have the facilities for performing the particular test in question. The request for re-test in outside laboratories will be conditional upon the party concerned meeting the cost of the re-test. 8.11 It is always open to the assessee concerned to get the authenticated sample, in its possession, analysed in any laboratory of his own choice and submit the findings of such laboratory for due consideration on merits of each case, by the appropriate adjudicating/appellate authority. However, the assessee should ensure that the laboratory which analyses the samples indicates clearly in its test report the full particulars of the samples and whether the central excise seals affixed to the samples were intact or not at the time of its receipt by such laboratory. 8.12 The payment of a fee for re-test does not entitle the assessee to a copy of chemical report. The result of any such retest must however be to the owner at the earliest. Where a copy of the test report is to be furnished the assessee at its request, the Department shall have the option to provide only a concise, edited) form of the Test Report. The editing of the Test Report should be done in consultation with the Chemical Examiner. 8.13 For the purpose of market enquiries regarding the value of samples can be drawn by Central Excise Officer on written order of the Deputy/ Assistant Commissioner of Central Excise, on returnable basis. There is no need to make any issue entries in Daily Stock Account for such Samples as the same are to be returned to the factory. The Range Officer should maintain a simple account showing the date of taking the sample, quantity taken and date of return. There should be proper acknowledgement of drawl and return of sample. The officer, who draws sample, will also give acknowledgement to the assessee and take acknowledgement when he returns the sample. 9. Clearance of model/proto-type without payment of duty for trial etc. 9.1 Where a finished excisable goods falling in the category of model/proto-type are to be sent out for trial purposes by actually putting them to effective use after conducting certain test to ensure that they meet with certain standard/specified norm, clearance may be allowed on payment of duty. Their subsequent return to the factory may be regulated in terms of rule 21 of the said Rules. 10. Samples drawn at the time of export of goods 10.1 Three sets of samples are drawn at the time of examination or port goods. Two sets of samples, duly sealed, are handed over by the Central Excise Officer examining the consignment to the exporter or his authories agent for delivery to the custom officer at the point of export. The Central Excise Officer for his record retains the third set of sample. 10.2 The Customs Officer will check the export goods with the sample before allowing export. The samples shall be dealt with in accordance with instructions/ standing orders of the Board or the Commissioner of Customs.