V.K. Agrawal, Member (T)
1. In this appeal filed by M/s. Mapra Laboratories P. Ltd. the issue involved is whether the benefit of Notification No. 171/70-C.E. is available to the samples of P or P Medicines manufactured by them.
2. The appellants under their letter dated 2-9-2000 have requested to decide the appeal on merit on the basis of written submissions and records available. We, therefore, heard Dr. D.K. Verma, learned SDR, and perused the records.
3. The learned SDR submitted that the appellants manufacture P or P medicines and avail of exemption under Notification No. 171/70-C.E. dated 21-11-1970 in respect of samples drawn for quality control purposes as per provisions of Drugs & Cosmetics Act; that the Additional Commissioner denied the exemption as the samples were not packed in a form distinctly different from regular trade packing as required under the Notification; that the Commissioner (Appeals) also rejected the appeal filed by them on the same ground holding that it has not been disputed by the Appellants that the samples were not packed in distinguished packing from the regular packing in which the goods are ordinarily sold. The Appellants have contended in their memorandum of appeal that the samples have to be representative of the Medicament sold in the market as per the provisions of the Drugs & Cosmetics Act; that these were picked up at random from the production line and as such these could not be different from trade packs; that in any case these were clearly marked “Not for Sale” which made them different from trade packs. They have, further, submitted that these sample packs were required to be preserved within the factory and as such these were not cleared for sale; that in Benzal Pharma Pvt. Ltd., Mumbai v. CCE, Mumbai-II, Final Order No. 614/98-D dated 19-8-1998, the Tribunal set aside the demand of Central Excise duty on control samples holding that there was no clearance from the factory and no duty was payable thereon. The learned DR distinguished the decision in Benzal Pharma case by submitting that the provisions of Rules 9 & 49 of the Central Excise Rules were not brought to the notice of the Tribunal which provide that if any excisable goods is consumed or utilised as such it shall be deemed to have been removed from the place of manufacture immediately before such consumption. He contended that drawing the samples and keeping them within the factory amounts to consumption or utilisation of the excisable goods as such in terms of provisions of Rules 9 & 49 of the Rules. This will amount to clearance making the goods liable to central excise duty. He relied upon the decision in the case of Themis Pharmaceuticals v. CCE, Surat, 1998 (98) E.L.T. 187 wherein the benefit of Notification No. 48/77 was denied as the clinical packs and commercial packs were packed identically. Finally he relied upon the decision in the case of Arista Pharmaceutical Ltd. v. CCE, Bhopal 2000 (39) RLT 658 (CEGAT) wherein it was held that “drawing of samples and retaining the same for specified period is nothing less but utilisation of manufactured excisable goods as such in the place of manufacture itself and in view of explanation to Rules 9 & 49 shall be deemed to have been removed from place of manufacture.”
4. We have considered the submissions of both the sides. It is not disputed by the appellants that the samples were not packed in distinct packing as per requirement of the Notification. The conditions specified in the Notification were twofold – firstly the packing should be marked “Not for Sale” and, secondly, they should be packed in a packing which is distinguished from the trade packs. If the appellants want to avail of benefit of exemption Notification they have to comply with the conditions specified therein. We agree with the learned DR that taking of samples for being retained inside the factory in accordance with the provisions of Drugs & Cosmetics Act will be deemed clearance as per explanation to Rules 9 & 49 of the Central Excise Rules inasmuch the P or P medicines are being utilised as samples. Once the retaining of samples is deemed clearance, central excise duty becomes payable by the Appellants. Similar views were expressed in the case of Arista Pharmaceutical Ltd. (supra). In that decision, the decision in the case of Benzol Pharma was also distinguished observing that the said decision was on the basis of facts and circumstances of the case, particularly the fact that there was no finding recorded by the adjudicating authority on the point of use of excisable goods. Following the ratio of the decision in the case of Arista Pharma, we find no reason to interfere with the impugned order and accordingly reject the appeal.