L.T.C. LTD. versus COLLECTOR OF CENTRAL EXCISE, PATNA

Cigarette sticks removed for quality control testing within factory premises are fit for consumption, and manufacture is complete at the sticks stage prior to packing; thus they are liable to excise duty. Packing is not part of manufacture but relates to sale. Excise duty is not leviable on destroyed sticks, but in absence of any account or evidence of destruction, duty applies to all sticks sent for testing.

Parties: Appellant: ITC Ltd.; Respondent: Collector of Central Excise, Patna
Jurisdiction: India
Judgment Date: 10 December 2002
Procedural Posture: Civil Appeal / Decision on Appeal From Tribunal
Outcome: Appeals dismissed
Legal Topics: Excise Duty on Samples, Marketability Test for Excisable Goods, Manufacture Under Central Excise Act

Taxation Central Excise Excise Duty on Samples Marketability Test for Excisable Goods Manufacture Under Central Excise Act

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Full judgment text Legal principles 6 Authorities cited 9 Party arguments 2 Amounts and remedies 4

Parties

ITC Ltd.

Appellant

Collector of Central Excise, Patna

Respondent

Procedural Posture

Civil Appeal / Decision on Appeal From Tribunal

Legal Issues

1 Whether excise duty is leviable on samples of cigarettes removed for quality control test within factory premises
2 Whether excise duty is leviable on cigarette sticks destroyed during the process of testing

Ratio Decidendi

Court Disposition

Appeals dismissed

Orders

Excise duty to be levied on entire stock of cigarette sticks sent to laboratory for quality control test
No order as to costs