TMI Blog2009 (6) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is time barred. Held that- As regards invoking of the extended period of limitation is concerned, the appellants never informed the Department about drawl and manner of disposal of samples on or before this issue was raised by the Department during EA 2000 audit. Acquiring knowledge by the Department does not take away the period of five years provided by the Law Makers in the Act itself. They have suppressed the fact with intent to evade payment of duty on such samples. We also note that subsequently the appellants intentionally misrepresented the issue and avoided payment of duty on the samples. We do not find any ground to interfere with the impugned orders passed by the lower authorities below. Accordingly, we uphold the same and rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regarding the duty demand on the samples, which were cleared by the appellants as waste and scrap. The appellants are the manufacturers of Flexible packaging material falling under chapter 39 and clearing the samples drawn, as waste scrap on payment of duty. Consequent to EA 2000 audit, the duty is now demanded on the cost of production (CAS4) and in the last show cause notice on the sale price of the final product. The appellants have submitted that the differential duty is not payable on the following grounds: (i) The demand is time barred as the show cause notice is issued on 19-10-2005 covering the extended period April, 2000 to June, 2005. The audit was conducted in July, 2002 to Sept., 2002 and the report of compliance was sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d accordingly cleared as waste on payment of duty. (v) The Judgment of Apex Court in the case of ITC Ltd. - 2003 (151) E.L.T. 246 (S.C.) is not applicable to their case as in ITC Ltd. case the samples are used up on testing and ITC Ltd. have not kept any account of the samples. Hence, the Apex court ordered that the duty is to be paid on the entire quantity of the samples drawn. 6. The learned SDR reiterated the findings of the lower authorities below. He also relied upon the relevant paras of the Boards' supplementary instructions (Chapter 11) and the Judgment of the Hon'ble Supreme Court in the case of ITC Ltd. (Supra) in support his claim that the duty is leviable on the samples when removed for quality test within the factory. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to maintain a proper account of receipts and the utilization of samples in the 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 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 sample before their removal for test purpose unless otherwise exempted by a duty exemption notification. 3.3 Samples for other purposes 3.3.1 Where samples are required for the purposes specified at (iii) (iv) and (v) of paragraph 2.1 above, the procedure specified at paragraph 3.2 shall be followed. However, it is clarified that when a manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity on the control samples for medicine retained in the factory. The Larger Bench of the Tribunal held that the control samples retained in the factory are not liable to duty, if proper account is maintained. It was further held that if any time the manufacturer desires to clear such samples then these should be assessed to duty as applicable. It appears that no testing was involved in this case. Para 3.3.1 of the Boards' supplementary instructions also states that when a manufacturer preserves the samples of their product for some period for investigation of complaints, if any, no duty should be charged on these samples considering that the goods remain within the factory. Duty shall be charged, unless exempted by a notification, once the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the extended period of limitation is concerned, the appellants never informed the Department about drawl and manner of disposal of samples on or before this issue was raised by the Department during EA 2000 audit. Acquiring knowledge by the Department does not take away the period of five years provided by the Law Makers in the Act itself. They have suppressed the fact with intent to evade payment of duty on such samples. We also note that subsequently the appellants intentionally misrepresented the issue and avoided payment of duty on the samples. 12. We do not find any ground to interfere with the impugned orders passed by the lower authorities below. Accordingly, we uphold the same and reject the appeals. Stay petition no. 249 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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