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TMI Blog2024 (8) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... s payable by them. It is found that Department s contention that the appellants have not maintained appropriate records and therefore, in terms of Para 3 of Chapter 11 of Supplementary Instructions, duty requires to be paid, is not acceptable. Understandably, there are no records prescribed for this purpose. The internal records maintained by the appellants have to be taken into consideration. On the basis of the records available, it is found that the appellants have maintained records as far as the control samples are concerned and as far as internal samples are concerned, it can be gleaned from the Standard Operating Procedures adopted by the appellants that the samples are either consumed in the course of testing or destroyed. In the absence of any contrary proof put forth by the Revenue, the claim of the appellants cannot be brushed aside - as long as the samples are not cleared outside the factory, no duty is payable. Extended period of limitation - HELD THAT:- The Principal Bench in the case of SHYAM SPECTRA PRIVATE LIMITED (FORMERLY CITYCOM NETWORK PRIVATE LIMITED) VERSUS COMMISSIONER OF SERVICE TAX, DELHI II [ 2024 (8) TMI 95 - CESTAT NEW DELHI ] held, following the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd the drawl and destruction of samples in their private record also; Department relies on provisions contained in Para 3.2 of Chapter 11 of the CBEC Manual of Supplementary Instructions. She submits that no excise duty payable on the samples drawn for in-house testing; it has been wrongly alleged that the appellants were not maintaining any records for the drawl and destruction of the samples. 4. Learned Counsel further submits that in terms of Section 3 of the Act, excise duty is leviable on the manufacture of excisable goods; the samples do not conform to be final products ready for clearance; manufacturing process involving bottling and labeling is not complete at the time of drawl of sample and therefore, the samples cannot be held to be excisable goods. The appellants draw samples for each batch of the drugs; during testing the samples either get consumed or minor remnant, if any, is destroyed; the samples not being cleared outside the factory are not liable to excise duty. She relies on the following cases: BBF Industries, Unit // vs. CCE, Jammu Kashmir- Fina/ Order No. 63051/2018 dated 06.09.2018, CESTAT Chandigarh Hindustan Unilever Ltd. vs. Commissioner Of C. Ex., Pune-ll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n taken in pursuance of the statutory requirement and as such, substantial benefit cannot be taken away due to non-compliance of procedures. 6. Learned Counsel submits that the issue is already decided in their favour in their own case by the Larger Bench in the case of Dabur Pharma Ltd. (earlier name of the appellant) 2005 (182) ELT 185 (LB); it was categorically held that no excise duty would be leviable as long as the samples are kept in the factory for testing and not cleared from there; the view taken by the Tribunal has been affirmed by the Hon ble High Court of Himachal Pradesh 2010-TIOL-831-HC-HP-CX; it has been held in S.S. Engineers -2023 (7) TMI 717 (SC) and Carrier Airconditioning and Refrigeration Ltd. 2023 (4) TMI 870 (Tri. Chd.). She further submits that in respect of Appeal No. E/61271/2018, the Adjudicating Authority has dropped the demand in respect of control samples relying on the decision of the Larger Bench in their own case supra. 7. Learned Counsel submits in addition that there was no suppression of facts by the appellants and they have been filing the Returns regularly; the entire exercise is revenue neutral as the appellants would have been eligible for C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the C.B.E. C s and the Supplementary Instructions to the Excise Manual from 1-9-2001 clarifies the position that the samples required for laboratory test in the factory and for preservation for investigation of complaints may be allowed to be drawn provided that a proper account of receipts and utilisation in the test in the laboratory is maintained. Manufacturer can preserves the samples of their product for some period for investigation of complaints, if any. No duty should be charged on these samples but an account of such samples should be maintained in the prescribed form. If at any time the manufacturer desires to clear these samples then these should be assessed to duty as applicable. Therefore, the control samples as long as these are kept in the factory and not cleared from there, these will not be chargeable to duty if proper account is maintained. When these samples are cleared for test or for destruction at that time assessment should be made for duty, if any, leviable as per law. 10. Coming to the samples drawn for internal purposes, we find on going through the SOPs that it is mentioned at Para 3.2 that after completion and review of the batch, the samples shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries Ltd. (supra) has no relevance to the facts of the present case. 12. We find that Department s contention that the appellants have not maintained appropriate records and therefore, in terms of Para 3 of Chapter 11 of Supplementary Instructions, duty requires to be paid, is not acceptable. Understandably, there are no records prescribed for this purpose. The internal records maintained by the appellants have to be taken into consideration. On the basis of the records available, we find that the appellants have maintained records as far as the control samples are concerned and as far as internal samples are concerned, it can be gleaned from the Standard Operating Procedures adopted by the appellants that the samples are either consumed in the course of testing or destroyed. In the absence of any contrary proof put forth by the Revenue, the claim of the appellants cannot be brushed aside. We find that Department relies heavily on the ratio of the Hon ble Apex Court s decision in the case of ITC Ltd. (supra). However, we find that the facts of the case are different for the reason that the item before the Hon ble Supreme Court was cigarettes and the samples therein were being dr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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