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TMI Blog2005 (2) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, the matter was placed before the Larger Bench for decision on the issue involved. 2. Shri Kumar Santosh, learned SDR pleaded that there is no exemption notification for the control samples retained by the appellants in their factory. The samples are therefore chargeable to duty. He further pleaded that as per Rule 9 read with Rule 49 of Central Excise Rules, 1944 excisable goods made in a factory if consumed or utilized - (i) as such or after subjection to any process or -(ii) for manufacture of any commodity; whether in a continuous process or otherwise, in a factory shall be deemed to have been issued out of, or removed from such factory, immediately before such consumption or utilization. In view of this the control samples shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntracts or orders from the Government or for enforcement of control measures; (iv) for display at exhibitions, fairs and in show cases; (v) for market inquiries by Central Excise Officers Procedure for the drawal and accounting of these samples. I. Trade samples II. Samples for test purposes The samples from this category will generally include - (a) Samples required for laboratory test in the factory and for preservation for investigation of complaints; (b) Samples required for tests at sister concerns and independent testing agencies; (c) Samples for Government Test house and other Government Departments; and (d) Samples required to be sent to the Chemical Examiners for test. In the case of samples at (a) above, requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 5. Thus, from the instructions, it is clear that right from 1979 the Department have clarified that no duty is required to be charged on the samples, which are retained in the factory for control purposes unless these are cleared from the factory. He relied on the following decisions in support of his claim:- (i) I.T.C. v. C.C.E., Patna - 2003 (151) E.L.T. 246 (S.C.) (ii) Bhansali Engg. Polymers Ltd. v. C.C.E. - 1999 (114) E.L.T. 947 which was confirmed by the Hon'ble Supreme Court as reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 clea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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