Whether excise duty payable on control samples of pesticides preserved till the date of expiry?

PJ/Case Laws/2012-13/1391

Case:- VANTECH CHEMICALS LTD V/S COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX HYDERABAD-I COMMISSIONERATE

Citation:- 2013-TIOL-23-CESTAT-BANG

Brief Facts: - The present appeal was filed by the assessee by aggrieving from Order-in-Appeal No.16 & 17/2011 (H-I) CE Dated: 25.2.2011 passed by the Commissioner of Customs and Central Excise, Hyderabad. The appellant was paying excise duty whenever the pesticides were removed from their factory. The appellant used to preserve samples of the goods manufactured in batches and cleared from the factory. These samples i.e., control samples used to be so preserved till the date of expiry. In case, during the relevant period, any complaint regarding the efficacy of the pesticide arose from the market, the appellant would conduct test on the relevant control samples to find out the cause of the complaint. The appellant-assessee claimed that this practice was followed because of statutory requirement. After the date of expiry, the control samples would be destroyed.

Reasoning of Judgment: - The Hon’ble Tribunal held that there is no dispute that the pesticides are excisable and the appellant assessee was paying excise duty whenever they were cleared from their factory. The appellant used to preserve samples of the goods manufactured in batches and cleared from the factory. These samples (control samples) used to be so preserved till the date of expiry. In case, during the relevant period, any complaint regarding the efficacy of the pesticide arose from the market, the appellant would conduct test on the relevant control samples to find out the cause of the complaint. It is claimed that this practice was followed as statutorily required. After the date of expiry, the control samples would be destroyed. On these facts, which are not in dispute, it has to be held that the appellant had no liability to pay duty on the control samples of pesticides during the relevant period of dispute. This case of the appellant is squarely supported by the Tribunal's decision in the case of Positive Packaging Industries Ltd. vs. CCE, Raigad = (2009-TIOL-2448-CESTAT-MUM). (Final Order dated 24.6.2009 in appeal No. E/50 & 673/2007, E/724/2008 and E/280/2009). Therefore, the impugned order is set aside and this appeal is allowed and the Stay application also stands disposed of.

Decision: - The appeal was allowed.

Comment:-The analogy drawn from this case is that the control samples preserved till the date of expiry and thereafter destroyed are not chargeable to excise duty.

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PJ/Case Laws/2012-13/1391

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