TMI Blog2005 (8) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... s drawn for testing purposes were duly accounted for and finally destroyed. Therefore, no duty was payable thereon. The lower authorities held that vide Notification No. 68/94, dated 12-3-94, the cigarettes samples drawn for testing purposes were chargeable to duty from 12-3-94 and removal of such samples were not reflected in RG-I or in monthly returns submitted in Central Excise Department. It is also observed that para 114II(a) of the Basic Manual of Departmental instructions provides for duty of said samples and also Hon'ble Apex Court has clearly defined dutiability of such samples drawn for testing purposes in the factory in Appeal No. 6402 of 1995, dated 10-12-2002. They, further, observed that vide CBEC Circular No. 1/87 S6, dated 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... destroyed and they were duly verified and authenticated while the Department for the period of two years immediately preceeding the material period and the same were maintained in the same manner and format during the material period. He submits that the appellant could not be faulted for the Departments failure to verify and authenticated the accounts for the material period though it carried out verification of authentication during the material proceeding period. Therefore, he submits that in view of the Supreme Court's judgment, no duty was payable on the samples destroyed in the course of Quality Control Test and which was binding upon the Commissioner. He grossly violated liability in not following the judgment. He submits that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the judgment of the Hon'ble Supreme Court and prior to that judgment of the Supreme Court rendered on December 10, 2002, no duty was payable on the cigarette sticks drawn for the purpose of Quality Control test in view of the decision in 1999 (114) E.L.T. 70 (Godfrey Philips India Ltd. v. Commr. of Central Excise) which was followed by the Hon'ble CEGAT in the appellant's case in the order dated May 10, 2000 [2001 (137) E.L.T. 829 (Tri. - Kolkata)]. The said order dated May 10, 2000 was accepted by the Department and the Deputy Commissioner by order dated November 29, 2001, dropped the demand for the period March 12, 1994 to February 28, 1998 in respect of the appellant's Munger factory. Therefore, he submits that none of the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor of Central Excise, Patna - 2003 (151) E.L.T. 246 (S.C.) has held that the samples of cigarettes drawn for test purposes in the Quality Control Laboratory for testing purposes prior to packing of the same are also liable to levy of duty. Therefore, he submits that the impugned order passed by the Commissioner of Appeals is in consonance with the law laid down by the Hon'ble Supreme Court. Therefore, he submits that the appeals may be dismissed. 4. In present case the appellant carries out various Quality Control tests such as firmness test, density test, individual weight variability test and moisture test during the manufacturing process. The purpose of these tests is to keep the variations in quality of the product within the tolera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le goods manufactured and consequently liable to payment of excise duty under the provisions of the Act? (ii) Whether excise duty is leviable on the cigarettes that are destroyed during the process of testing in the laboratory? Hon'ble Apex Court for the question No. 1 held as under : * "Thus, we hold that sticks of cigarette which are removed for the purpose of test in the quality control laboratory located within the factory premises of the appellant-company are liable to excise duty" For the question No. II, the Hon'ble Court held as under : * Coming now to the second question, it may be stated that learned counsel appearing on behalf of the Revenue could not dispute the proposition that the quantity of cigarette stic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt produced before the Commissioner of Appeals the QUIS sample register for the period from April, 1998 to December, 2002 to show that the same was maintained in the same manner and format all through out. The Department verified and authenticated the said register for the period April, 1998 to 2000 but discontinued such verification and authentication thereafter. The appellant maintained complete accounts in relation to the destruction of cigarette sticks during the course of testing. Merely because the Department decided not to continue with the verification and authentication of the accounts for the period from May, 2000 could not constitute any ground for ignoring the same. The appellant's factory was under physical control. For the per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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