ARISTO PHARMACEUTICAL LTD Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE issue involved in this appeal filed by M/s. Aristo Pharmaceuticals Ltd. is whether taking of samples of the P or P medicaments manufactured by them and keeping the same in the factory premises amounts to removal of excisable goods in terms of the provisions of Rules 9 and 49 of the Central Excise Rules.

(2.) SHRI S.S. Gupta, learned Chartered Accountant, submitted that the appellants manufacture P or P medicaments classifiable under Chapter 30 of the Schedule to the Central Excise Tariff Act; that under the provisions of Drugs and Cosmetics Rules, they have to maintain reference samples from each batch of the drugs and these samples are required to be retained till expiry of drugs and 3 months thereafter; that the Additional Commissioner, under Adjudication order Nos. 162 -167/96, dated 24 -10 -1996 confirmed the demand of excise duly on the quantity of P or P medicament taken as reference sample holding that exemption from payment of duty on such quantity under Notification No. 171/70 -C.E., dated 21 -11 -1970 was not available as samples were not packed in a form distinctly different from the regular trade packing which is one of the conditions specified in the Notification for availing the exemption; that since the samples were drawn from regular trade packings and were utilised within the factory, it is deemed to have been cleared from the factory under Rules 9 and 49 of the Central Excise Rules; that on appeal filed by them, the Commissioner (Appeals), under the impugned order dated 7 -1 -2000, has rejected their appeal observing that the Appellants have not disputed the fact of not packing the samples in a form distinct from trade packing and confirming the findings in Adjudication order that goods are deemed to have been removed from the factory.

(3.) THE learned Chartered Accountant, further, submitted that in view of the provision of Rule 74 of Drugs and Cosmetic Rules, condition (L) of licence provides that the licensee shall maintain reference samples from each batch of the drugs to be retained for a period of three months beyond the date of expiry of potency and in case of no date of expiry is specified, the reference sample shall be maintained for a period of three years; that medicaments after the period of expiry becomes unsaleable and as such is not marketable. He relied on the decision in the case of Bezal Pharma v. CCE, Mumbai, 1998 (103) E.L.T. 449 (T), wherein it was held that as the adjudicating authority has not recorded any findings to controvert the claim that samples were not retained but were cleared from the factory, there was no clearance from the Appellants' factory and accordingly no duty was payable. The learned Chartered Accountant emphasised that removal of goods from factory area to laboratory did not amount to removal as contemplated under Rules 9 and 49; that the Explanation to Rule 9 clearly provides that excisable goods produced in any plant should be con -sumed or utilised as such in further process; that the medicaments retained as control sample is retained as it is; that as such even after the Explanation under Rule 9, the same will not amount to removal of goods.