CHAPTER 11
SAMPLES1. Introduction
1.1 There is no specific provision in
Central Excise (No.2) Rules, 2001 (hereinafterreferred to as the ‘said Rules’) governing drawl and testing of ‘samples’ of manufacturedgoods or inputs to ascertain their correct identity or classification or eligibility of anyexemption. However, under various procedures, such as relating to exports, assessmentetc. drawl of samples is required.
2. Categorization of Samples
2.1 The samples can be categorized, as follows:
(i) Trade samples sent to customers for trial;
(ii) Samples for test purposes;
(iii) Samples for supply against sale contracts or for enforcement of controlmeasures;
(iv) Samples for display at exhibitions, fairs and in show-cases; and
(v) Samples for market inquiries by Central Excise Officers.
2.2 Apart from the assessee requiring the samples for cogent reasons, the CentralExcise Department may also require drawl and testing of samples and the assessee shallcomply with such directions as may be given in this regard. However, there shall not beany drawl and testing of samples in routine manner.
3. Procedure for the drawl and accounting of Samples
3.1 Trade Samples
3.1.1 The manufacturers’ generally give such samples to their customers for ‘trial andapproval’. The removal shall be in the same manner as the removal of goods for homeconsumption. The manufacturer shall prepare an invoice under rule 11 of the said Rulesand record the details in his Daily Stock Account. He shall discharge duty in the mannerspecified in rule 8 of the said Rules unless the removal of samples are exempted fromduty by a notification issued under Section 5A of the Central Excise Act, 1944.
3.1.2 Samples of certain goods sent to the trade by manufacturers are likely to bereturned. In such cases, the procedure specified in rule 16 of the said Rules and theinstructions relating thereto shall be followed.
3.2 Samples for test purposes
3.2.1 The samples of this category will generally include:-
(i) Samples drawn by in-house laboratory for testing quality and adherenceto product specifications;
(ii) Samples drawn for preservation for investigation of complaints;
(iii) Samples drawn for test at other concerns and independent testingagencies;
(iv) Samples required to be sent to Government Test centers including theChemical Examiners for test.
3.2.2 The assessee is required to maintain a proper account of receipts and theutilisation of samples in the test, in the laboratory. The removal shall be in the samemanner as the goods are removed for home consumption. The manufacturer shallprepare invoice under rule 11 the said Rules and make issue entries for the goods(samples) in the Daily Stock Account. Appropriate duty shall be paid by the assessee onthese samples before their removal for test purposes unless otherwise exempted by aduty exemption notification.
3.3 Samples for other purposes
3.3.1 Where samples are required for the purposes specified at (iii), (iv) and (v) ofparagraph 2.1 above, the procedure specified at paragraph 3.2 shall be followed.However, it is clarified that when a manufacturer preserves the samples of their productfor some period for investigation of complaints, if any, no duty should be charged onthese samples considering that the goods remain within the factory. Duty shall becharged, unless exempted by a notification, once the samples are cleared from thefactory. If at any time the manufacturer desires to destroy these samples, procedurespecified in rule 21 of the said Rules shall be followed.
4. Quantity of samples
4.1 Samples should be drawn in reasonable quantity. However, in some cases aspecific quantity is asked for which should be supported by requisition order from theChemical Examiner. An account of all departmental samples drawn and sent to theChemical Examiner should be maintained by the Range Officer.
5. Test Memo
5.1 A test memo should always be prepared in triplicate, the original to be sent tothe Chemical Examiner, triplicate to the Deputy/Assistant Commissioner andduplicate retained on the Range Officer’s record.
6. Preservation of Samples
6.1 The samples drawn by the Range staff but not sent for test to laboratories shouldbe preserved for six months from the date of analytical report on the sample tested. Incase of any discrepancy being noticed, the samples have to be preserved till theperiod of Appeal or Revision application is over or till disposal of Appeal/RevisionApplication. The remnants, which are not required by the concerned assessee, may bedestroyed soon after the parties specially inform that they accept the analytical reportfurnished by the Chief Chemist or after completion of the period of appeal or revisionpetition is over, as the case may be.
7. Cost of samples when drawn by the Department
7.1 In respect of samples drawn by the officers of the Central Excise Department forascertaining the identity of goods/its classification or any other official purposes relatingto Central Excise, the cost of samples may be reimbursed on manufacturer’s request outof the contingency by the divisional officer. The cost of the containers required for drawlof samples may not be much and if the same cannot be borne by the assessee throughpersuasion the same should be borne by the Department.
8. Procedure for testing and re-testing of samples drawn by the Department
8.1 Except where there are special instructions for particular kind of samples, therepresentative samples from such or any lot must be drawn in quadruplicate in thepresence of the owner/manager of the factory or his representatives.
8.2 The quantities of excisable goods or materials taken for testing should be theminimum necessary for testing and the Commissioner will, in consultation with theChemical Examiner concerned, specify for each kind of excisable goods or materials thesize of samples for this purpose.
8.3 The samples should be sealed with Excise seals and a declaration obtained fromthe owners (manufacturers) to the effect that the samples drawn are representative ofthe lot. The assessee, if he so desires, may also be permitted to affix his seal on thesamples.
8.4 The four samples drawn for test should be clearly marked as:
(a) Original for Chemical Examiner (to be despatched to him along with thedeclaration and the relative test memorandum under intimation to theAssistant/Deputy Commissioner concerned).
(b) Duplicate to be sent to the Deputy/Assistant Commissioner of Central Excise (tobe forwarded to him for safe custody for further use in case a dispute arises).
(c) Triplicate for Range Officer (to be retained for any future reference or to coverloss by post or other emergency).
(d) Quadruplicate to be given to the manufacturer (for his own record).8.5 Before despatch of sample to the Deputy/Assistant Commissioner of CentralExcise and the Chemical Examiner, the samples should be packed properly, sealed andmarked in such a way that they suffer no loss or deterioration in transit or subsequentstorage.
8.6 The Chemical Examiner after test, will return the remnant sample, if fit for re-testand not in other cases, together with his test report, to the Assistant Commissionerconcerned. The Chemical Examiner will be in position to indicate whether or not aremnant is fit for re-test and the Deputy/Assistant Commissioner of Central Excise or otheradjudicating authority will in most cases be able to anticipate whether the assessee willdemand a re-test or not. The test results should be speedily communicated to theAssessee.
8.7 The Department shall carefully preserve the remnant sample.
8.8 Whenever the assessee is dissatisfied with the test carried out by the ChemicalExaminer he can apply to the Deputy/Assistant Commissioner of Central Exciseconcerned, after payment of the prescribed test fees, for a retest within 90 days from thedate on which the test result was communicated to the him.
8.9 Where the remnant sample is available in sufficient quantity in its original state, re-testshould ordinarily be on such remnant sample. Where such remnant sample wasreceived from the Chemical Examiner but it is not in sufficient quantity or in original state,or where the party concerned desires, for one or the other reasons, a re-test on duplicateor triplicate sample, Deputy/Assistant Commissioner of Central Excise, the adjudicatingauthority or, as the case may be, the appellate authority should pass an appropriateorder for re-test on duplicate or triplicate sample.
8.10 Where an assessee requests for re-test in a laboratory other than a ControlLaboratory (hereinafter in this paragraph referred to as “outside laboratory”) whether onthe remnant or the duplicate or triplicate sample, such request may be allowed fortesting the sample from an outside Government or Semi-Government laboratory with theprior permission of the Commissioner or the Appellate or the Reversionary authority, asthe case may be after Chief Chemist has confirmed that the departmental laboratoriesdo not have the facilities for performing the particular test in question. The requestfor re-test in outside laboratories will be conditional upon the party concerned meetingthe cost of the re-test.
8.11 It is always open to the assessee concerned to get the authenticated sample, inits possession, analysed in any laboratory of his own choice and submit the findings ofsuch laboratory for due consideration on merits of each case, by the appropriateadjudicating/appellate authority. However, the assessee should ensure that thelaboratory which analyses the samples indicates clearly in its test report the full particularsof the samples and whether the central excise seals affixed to the samples were intact ornot at the time of its receipt by such laboratory.
8.12 The payment of a fee for re-test does not entitle the assessee to a copy ofchemical report. The result of any such retest must however be communicated to theowner at the earliest. Where a copy of the test report is to be furnished to the assessee atits request, the Department shall have the option to provide only a concise, edited) formof the Test Report. The editing of the Test Report should be done in consultation with theChemical Examiner.
8.13 For the purpose of market enquiries regarding the value of excisable goods,samples can be drawn by Central excise Officer on written order of the Deputy/AssistantCommissioner of Central Excise, on returnable basis. There is no need to make any issueentries in Daily Stock Account for such samples as the same are to be returned to thefactory. The Range Officer should maintain a simple account showing the date of takingthe sample, quantity taken and date of return. There should be properacknowledgement of drawl and return of sample. The officer who draws sample, will alsogive acknowledgement to the assessee and take acknowledgement when he returnsthe sample.
9. Clearance of model/proto-type without payment of duty for trial etc.
9.1 Where a finished excisable goods falling in the category of model/proto-type areto be sent out for trail purposes by actually putting them to effective use afterconducting certain test to ensure that they meet with certain standard/specified norm,clearance may be allowed on payment of duty. Their subsequent return to the factorymay be regulated in terms of rule 21 of the said Rules.
10. Samples drawn at the time of export of goods
10.1 Three sets of samples are drawn at the time of examination or sealing of exportgoods. Two sets of samples, duly sealed, are handed over by the Central Excise Officerexamining the consignment to the exporter or his authorised agent for delivery to theCustom Officer at the point of export. The Central Excise Officer for his record retains thethird set of sample.
10.2 The Customs Officer will check the export goods with the sample before allowingexport. The samples shall be dealt with in accordance with instructions/standing orders ofthe Board or the Commissioner of Customs.
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