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Amalgamated Bean Coffee Trading Company Ltd. Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I

2016 (3) TMI 569 - CESTAT BANGALORE

Duty demand on the clearance of coffee decoction for testing and destruction in the appellant's factory premises - duty liability on the samples which are collected from the shop floor and tested in the in-house laboratory - Held that:- Collection of the samples of finished goods and testing the same for ascertaining the quality is part of the manufacturing process. The assessee, has to ascertain that the final products manufactured by them are conforming to the standards laid down by themselves .....

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e as well as the adjudication order and the order of the first appellate authority, that there is no dispute that the testing of the coffee decoction is in the appellants own in-house laboratory and there is no remanents. On the face of such factual matrix, we have to hold that both the lower authorities have misdirected their findings in coming to a conclusion that the testing of the samples of coffee decoction are liable to duty. - Decided in favour of assessee - E/572/2004-DB - Final Order N .....

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e of the Revenue that the appellant while manufacturing coffee decoction, withdraws some quantity for testing the quality of the product and as there is no sale involved and there being clearance of finished goods, appellant is required to discharge the central excise duty on such decoction which is withdrawn from the shop floor for testing. The lower authorities relied upon the judgment of the Apex Court in the case of ITC Ltd. to hold against the appellant. 3. While arguing the appeal, learned .....

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se quality control testing; without which, the products i.e. coffee decoction is not marketable; the valuation of the products is also incorrect; question of remission of duty on the goods tested and getting destroyed during the testing purpose will not arise. 4. Learned DR on the other hand would submit that the Tribunal in the case of Positive Packaging Industries Ltd. Vs. CCE, New Panvel [2010 (249) E.L.T. 57 (Tri.-Mumbai)] has held that the samples drawn for testing quality and preserved for .....

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riate duty on home clearances. In order to ascertain whether the final goods are of the standards set, samples are drawn from the shop floor and tested in the in-house laboratory during the course of which the said samples get destroyed. 5.3. In our considered view, the demand of the duty raised by the Revenue, is unsustainable, incorrect for more than one reason. 5.4. Collection of the samples of finished goods and testing the same for ascertaining the quality is part of the manufacturing proce .....

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. This cannot be said or equated with the clearances of the goods and duty liability can be fastened. We find from the show-cause notice as well as the adjudication order and the order of the first appellate authority, that there is no dispute that the testing of the coffee decoction is in the appellants own in-house laboratory and there is no remanents. On the face of such factual matrix, we have to hold that both the lower authorities have misdirected their findings in coming to a conclusion .....

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