2017 (11) TMI 276

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..... amples was maintained by the appellants. After testing of the samples, it gets converted into waste which was cleared by the appellant on payment of duty. As per this fact, the goods which were cleared from the factory, is the yarn waste and not the finished yarn. Therefore, the duty considering the said waste as finished yarn is absolutely incorrect. The removal of waste yarn is in the same manner as goods are removed for home consumption - there is no dispute that the appellants have discharged the excise duty on the clearances of waste yarn arising out of testing of yarn. Appeal allowed - decided in favor of appellant.
Mr. Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) Shri. Rajesh Ostwal, Advocate for appellant Shr .....

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..... issioner (AR) appearing on behalf of the Revenue reiterates the findings in the impugned order. He further submits that for the recording of the drawal of samples for testing and removal thereof, the provision is made under para 3.2.2 of Chapter 11 of CBEC Excise Manual of Supplementary Instructions, wherein it was clarified that the removal of samples for test purpose would be in the same manner as the goods are removed for home consumption. Therefore, even for withdrawal of samples in the present case it would attract excise duty. He submits that drawal of sample is of finished yarn, which subsequently becomes waste. Therefore, the duty on samples as finished yarn to be charged. He placed reliance on the judgement in the case of Positive .....

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..... . Similarly, in other decisions of Bhansali Engineering Polymers Ltd., J.K. Industries Ltd., Gulf Oil Corporation Ltd. (supra), it was held that the samples drawn for quality control test is not liable to duty. As regards the Ld. AR's contention that as per the instruction manual, the removal of samples should be in the same manner as removal of goods for home consumption. In this regard, we observed that the appellant while clearing the waste yarn followed the provision by paying duty on the clearances. Therefore, in our view the removal of waste yarn is in the same manner as goods are removed for home consumption. As regards the judgement in the case of Positive Packaging Industries Ltd. (supra) relied upon by the Ld. AR in the said case .....

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