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TMI Blog2009 (6) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... rds. 3. Since the common facts and law are involved in all the four appeals and the issue is within a narrow compass, these appeals are being taken up for final disposal by a common order after waiving the pre-deposit of duty and penalty in Stay Application No. 249 of 2009 in Excise Appeal No. 280 of 2009. Both the parties have consented for the final disposal. 4. The details of the appeal No., duty demanded, penalty imposed and the period covered are given below in the Tabular form. Appeal No. Period Duty Penalty E/50/07 April, 2001 to June, 2005 3,71,782/- 1,00,000/- E/673/07 July, 2005 to March, 2006 17,228/- 17,228/- E/724/08 April, 2006 to October, 2006 11,457/- 11,457/- E/280/09 Nov, 2006 to July, 2007 23,745/- 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory, as held by Apex Court in the case of Bhansali Engg. Polymers Ltd. v. CCE - 2002 (143) E.L.T. A175 (S.C.). (iii) Effective September, 2001, the clearance of samples is governed by the Boards' supplementary instructions (chapter 11), which states that no duty is required to be paid, when the preservative samples are retained in the factory and account of the same is maintained. These are liable to duty only when cleared from the factory. This view is also supported by the Judgment of the Large Bench of the Tribunal in the case of Dabur India Ltd. - 2005 (182) E.L.T. 185 (T. - L.B.). (iv) In their case, the sample is drawn from the bigger roll and the same can not be used for any purpose of packing. Since the sample cannot be us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awn were preserved for future references in case of any quality complaint. 9. For ease of reference and better appreciation, we extract below the relevant paras of Boards' supplementary instructions (chapter 11), which have been issued under Rule 31 of the Central Excise Rules. "3.2 Samples for test purposes 3.2.1 the samples of this category will generally include:- (i) Samples drawn by in-house laboratory for testing quality and adherence to product specifications; (ii) Samples drawn for preservation for investigation of complaints; (iii) Samples drawn for test at other concerns and independent testing agencies; (iv) Samples required to be sent to Government Test centers including the Chemical Examiners for test. 3.2.2 The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the samples are drawn for testing quality first and are thereafter preserved, in our view para 3.2.2 of the Boards' supplementary instructions will be applicable and the appellants are required to pay appropriate duty on these samples before their removal for test purposes by preparing invoice under Rule 11 of the Central Excise Rules and make issue entries for the goods (samples) in the Daily Stock Account. This is also supported by the Supreme Court Judgment in the case of ITC Ltd. Supra in which it has been held that the sticks of cigarettes removed prior to packing for quality control test are liable to duty. The issue involved before the Larger Bench of the Tribunal in the case of Dabur India Ltd. Supra was regarding the duty liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed back to the production unit after quality control tests were carried out and not at the stage when samples were drawn for testing. The Tribunal upheld the appellant's contention and held that the duty on the samples drawn for testing was not liable and accordingly set aside the demand on ABS polymers removed for testing of samples. In fact, the samples were drawn and after requisite tests, were brought back and duly accounted in the production. However, the facts involved in the present case are that the appellants had drawn the samples and after testing had not brought them back to the production but cleared them without payment of appropriate duty. Thus the facts in both these cases are distinguishable. 11.As regards invoking of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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