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TMI Blog2006 (4) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... The brief facts of the case are as follows :- The Respondents are manufacturers of Detonators, an excisable commodity. The Revenue proceeded against them on the ground that they had not paid the Central Excise duty involved on the Detonators drawn as samples from the each line of production, batch-wise, for the purpose of conducting tests like drop test, shake test, snatch test, series firing, lead plate test, sand bomb test, buxton test, etc. The Original authority confirmed the duty of Rs. 3,60,362/- and imposed a penalty of Rs. 10,000/- under Rule 173Q and Rule 25 of the Central Excise Rules. The Respondents appealed to the Commissioner (Appeals) who allowed the appeal of the Respondents. 3. The Revenue is aggrieved over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead confined its findings strictly to the facts of the case under reference which has no record of clearance made to testing. (iv) In the present case, the Respondents had the following options before him :- (a) In terms of Para 3.2.2 of CBEC's Central Excise Manual, the assessee is required to maintain a proper account of receipts and the utilization of samples in 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 of 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 the test purposes unless otherwis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marketable and they were not liable to duty - Sections 2 (f) and 3 of Central Excise Act, 1944. (c) J.K. Industries Ltd. v. CCE, Jaipur [2003 (156) E.L.T. 437 (Tri.- Del) wherein it has been held that Samples of tyres, drawn for testing in accordance with BIS Manual, destroyed during testing - testing being essential for making the goods marketable in absence of which the goods cannot be sold and they cannot be treated as marketable - Duty not chargeable. (d) Traco Cable Company Ltd. v. CCE, Cochin [2000 (126) E.L.T. 643 (Tribunal) wherein it has been held that Telephone cables - Underground jilly filled telephone cables - Piece of Cables taken out from the drum used for mandatory quality control and which get destroyed in the course of q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri. - Del.)] wherein it has been held that no duty is payable in respect of the goods which were destroyed during testing, (k) ITC Ltd. v. CCE, Kolkata-VI [2006 (195) E.L.T. 179 (Tri. - Kolkata)] wherein it has been held that Samples destroyed during course of quality control tests in laboratory within factory premises - Appellants maintained complete account relating to destruction of goods during such test - No duty leviable - Demand not sustainable. Further the learned Advocate pointed out that as per Para 141 of the Explosives Act, 1884, there are certain requirements as under :- "141. Restrictions on sale of explosives - (1) No person shall sell any explosive to any person who is not authorized to possess such explosives under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of ITC Ltd. (supra) held that samples destroyed during the course of quality control test within the factory premises when complete account is maintained cannot be subjected to duty. 5. We have gone through the records of the case carefully. In the ITC Ltd. case decided by the Apex Court and cited at various places, the following observations in Para 18 has been made :- "Coming now to the second question, it may be stated that the learned counsel appearing on behalf of the Revenue could not dispute the proposition that the quantity of cigarette sticks that is destroyed in the course of quality control test is not liable to excise duty." From this, it is very clear that the Apex Court has laid down that when product is destro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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