2007 (11) TMI 191

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..... are tested within the factory itself. They also draw reference samples which are retained up to period of 6 months from the date of manufacturing and thereafter they are destroyed since they cannot be marketed. The appellants were issued four show cause notices stating that they have cleared the samples for test purposes in their in-house laboratory for testing of quality and for adherence to product specification without complying with the procedures laid down under the Central Excise Rules, 2002 and without payment of Central Excise duty leviable thereon. The show cause notice further stated that the appellant draws one bottle of sample every hour for-its in house testing for each and every size of the product manufactured by them. The s .....

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..... appellant submit that duty has been demanded only because the samples were not entered in the statutory registers and samples were considered to be fully finished goods which have t be accounted for in the statutory records and can be removed only on payment of duty. It was submitted that it is admitted in all the show cause notices that the samples after testing were drained out or retained for shelf-life and were accordingly destroyed. There is neither allegation nor any claim in the show cause notice that the samples sent for testing and for shelf-life (in two show cause notices) were not ultimately destroyed. Duty is being demanded only on the ground that they were not entered in the statutory register and since they were fully finished .....

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..... there is no exemption in respect of samples drawn for testing purposes, duty has to be discharged on the same. In case the samples are destroyed in testing they have to apply for remission of duty which can be granted by the Commissioner which was not done in the present case and duty has been rightly demanded. 6. We have considered the submissions. We find that it is an undisputed fact that the samples after testing both in the laboratory and for shelf-life were destroyed by draining or were rendered unfit for use. It is also a fact that these samples were duly accounted for in the private register of the appellant and in fact the revenue has quantified the duty on the basis of the quantity shown in these private records. Therefore, the .....

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