TMI Blog2001 (3) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... llants were in possession of such a licence. 3.The Drugs and Cosmetics Act required compliance with the conditions prescribed in Rule 74 of the Drugs and Cosmetics Rules, 1945. Two of the sub-rules related to drawal of samples. Sub-rules (c) and (l) read as follows : "(c) the licensee shall either in his own laboratory or in any other laboratory approved by the licensing authority [under Part XV (A) of these rules] test each batch or lot of the raw material used by him for the manufacture of his products and also each batch of the final product and shall maintain records of registers showing the particulars in respect of such tests specified in Schedule U. The records or registers shall be retained for a period of five years from the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was alleged that in not declaring the drawal of the samples and in not paying duty, the assessees had suppressed facts and therefore the extended period was invoked. This notice was answerable to the Collector. After hearing the assessees the Collector adjudicated the case. Subsequently, a number of notices were issued periodically. These were adjudicated by the Jurisdictional Assistant Commissioner in three Orders-in-Original confirming the duty as alleged in the respective show cause notices. In three Orders-in-Appeal the Commissioner (Appeals) had upheld the confirmation. The present appeals are against these orders of the Commissioner and of the Commissioner (Appeals). 6.Shri Willingdon Christian distinguished between the two kin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to manufacture. The Court referred to the requirements of the Drugs and Cosmetics Act, 1940, which defined P or P medicines. The claim made before the Court was that labelling might be a process of manufacturer under the Drugs Act, but not under the Central Excise Act. The Court observed that P or P medicines could not be manufactured unless they confirmed with the provisions of the Drugs Act. The Hon'ble High Court held that in construing manufacture under the Central Excise Act, the definition of the Drugs Act, would be a material factor. 9.Shri A.K. Jain arguing for Revenue makes a claim that the judgment relates to P or P medicines whereas the substances covered in the present appeals are classifiable under Heading 38.22 being Misce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing test of marketability, the goods cannot be called to be dutiable goods. Therefore the question of short payment or non-payment of duty upon them also does not arise. 12.Shri Willingdon also submits that Rules 9 and 49 of the Central Excise Rules, 1944, could not be attracted unless the goods were cleared from the factory. His point is valid, as far as the samples in fully manufactured and marketable condition are concerned. Shri AK Jain submits that the samples drawn from the batch being manufactured were consumed during testing and that captive consumption also attracts duty. We find that destruction of this sample renders the batch from which was drawn as fully manufactured (Chemically speaking). By the time the batch is declared to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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