ITC LIMITED Vs. CCE

JUDGEMENT

(1.) THE short point to be considered in this case is whether samples are liable to duty or not.

(2.) WE find that the issue involved herein has already been considered by the Supreme Court in the very party's case wherein it was held that samples of cigarettes drawn for test purposes in the quality control laboratory within the factory are also liable to duty.

(3.) IN this context, Shri R. Sashidharan, Advocate, drew our attention to para 18 of the Order of the Supreme Court, which is as under: 18. Coming now to the second question, it may be stated that learned Counsel appearing on behalf of the Revenue could not dispute the proposition that the quantity of cigarette sticks that is destroyed in the course of quality control test is not liable to excise duty. He however, submitted that no evidence whatsoever was adduced on behalf of the appellant -Company either before the assessing authorities or the Tribunal to show that any cigarette stick was destroyed in the process of quality control test, much less cigarette sticks of any particular quantity inasmuch as, undisputedly, for major period no account at all was maintained and for some period, though account was maintained in relation to the quantity of cigarette sticks sent to the laboratory for testing, but no account was maintained as to how much quantity was destroyed during the process of testing. It was pointed out by learned Additional Solicitor General that though in the show cause notice the appellant -Company was specifically called upon to show cause for non -maintenance of account in relation to the sticks of cigarette sent for quality control test, but in spite of that it failed to produce any account whatsoever to show as to how much quantity of cigarette sticks was sent for quality control test during different periods, much less producing any account in relation to the destruction of the cigarette sticks during the course of testing. At this stage, Shri Ganesh submitted that the matter should be remitted either to the Tribunal or the assessing authority for affording opportunity to the appellant to produce the accounts and then record a finding as to how many cigarette sticks were destroyed during the course of testing. In our view, no useful purpose will be served by remitting the matter the on this question, firstly, because even according to the show cause reply filed by the appellant -Company before the assessing authorities, it had not maintained any account in relation to the destruction of cigarette sticks during the course of quality control test and, secondly, no reason was assigned for not producing any account either before the assessing authority or before the Tribunal in spite of the fact that it was clearly stated in the show cause notice that the appellant -Company was not maintaining any such account. In view of the non -maintenance and non -production of accounts in relation to the destruction of cigarette sticks during the course of testing, we are of the opinion that excise duty was leviable on the entire stock of cigarette sticks sent to the laboratory for quality control test.