TMI Blog2013 (12) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... f some value by itself did not render it as marketable or excisable - The waste has arisen either on account of damage of the bottles during the process of use or the plastic bottle has been scrapped after use of the bottles in50 cycles - If by continuously using an item, the said item becomes a scrap, it cannot be said that the so-called waste is a manufactured product. Demand on control samples of purified water – Held that:- It cannot be said that the appellant had cleared the control samples for purposes other than those stipulated – Following Dr. Reddy's Laboratories Ltd. vs. Commissioner of Central Excise, Visakhapatnam [2007 (7) TMI 145 - CESTAT, BANGALORE] - samples mandatorily drawn for testing and getting used up/destroyed duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant has manufactured plastic scrap and, therefore, duty is demandable and accordingly quantified a duty demand of Rs.56,880/-. 2.2 The appellant also keep three bottles of their finished goods as control samples from each batch of production as per the norms fixed by FDA. These bottles are retained to test the shelf-life of the product and to analyse customer complaints. However, the appellant failed to account for the production and clearance of the control samples of their finished goods. The number of such samples was estimated at 3033 valued at Rs. 1,94,595/- involving a duty amount of Rs. 31,981/-. Accordingly, a show cause notice dated 15/02/2002 was issued to the appellant demanding excise duty of Rs. 56,880/- on the scra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as a manufacturer of plastic scrap. Reliance is placed on the decision of the tribunal in the case of VVF Ltd. vs. Commissioner of Central Excise, Daman 2009 (248) ELT 593 and International Tobacco Company Ltd. vs. Commissioner of Central Excise, Ghaziabad 2004 (165) ELT 314 where, in similar situations, it has been held that waste and scrap getting generated during the process of manufacture or use of the goods, such waste and scrap cannot be considered as excisable goods. 3.2 As regards the demand of duty on samples of water bottle, it is argued that the samples are drawn to test shelf-life of the product and to attend to any complaints received from the customers. Therefore, samples drawn for testing purposes cannot be consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either tested or got consumed during the process of testing. In the absence of any records, the only conclusion is that the appellant has cleared the goods without payment of duty and, therefore, the demand would be sustainable. 5. We have carefully considered submissions made by both the sides. 5.1 As regards the demand of duty on plastic scrap, it is not in dispute that the appellant had used the polycarbonate bottles for packing and selling of purified drinking water. These bottles are returnable and reusable and the appellant used them at least for 50 cycles. During the process of such usage, the bottle got damaged which could no longer be used and after completion of 50 cycles, the appellant stopped using of these bottles and such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. 5.3 As regards the demand on control samples of purified water, it is an admitted position that the samples had been drawn as per the norms fixed by the Food and Drugs authorities. These were retained to test the shelf-life of the product of each batch and to analyse the customer complaints. Therefore, it cannot be said that the appellant had cleared the control samples for purposes other than those stipulated. There is also no evidence led by the Revenue to show that the appellant did not put to use the control samples by clearing them to customers. The only charge against the appellant is that they did not keep an account of the control samples drawn and tested. This Tribunal in the case of Dr. Reddy's Laboratories Ltd. (cited supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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