Per S.K. Bhatnagar, Vice President :

This is department's appeal against the order of Collector of Central Excise (Appeals), Allahabad dated 14.1.1991.

2. Ld. DR submitted that the respondents are manufacturer of Patent and Proprietary Medicines falling under Heading No. 30.03. They availed exemption of duty under Notification No. 48/77 for the period September, 1989 to January, 1990 without submission and approval of classification list and without fulfilling the condition as laid down in the said notification under Clause (iii) of the first proviso with intent to evade the payment of duty, inasmuch as the P.P. medicines purported to have been cleared by the party as Physicians Samples were not packed "in a form distinctly different from the regular trade packing." The party maintained uniformity in both types of packing and have only reduced slightly the medicinal contents as admitted through their letter dated 22.12.1989 and 30.1.1990 to the Superintendent of Central Excise, Naini, (Rural) and thereby neither fulfilling the condition as contained in their letter nor the spirit of the said notification. There is also nothing on record to show that any quantity of such P P Medicines have ever been supplied free to any hospital or nursing home and there is no medical representative on the pay-rolls of the company for supplying such medicines to physicians as they are entirely supplying such goods to sale promotion department of M/s. Dey's Medicial Stores Ltd. Calcutta. The A.C. confirmed the demand. Collector (A) allowed the appeal. In the instant case the size of the phial for clinical samples as well as for the trade packing of Entrofuram-M is the same although the party has reported that the phial of clinical sample contains a quantity of 50 ml. whereas that of the trade packing contain a quantity of 60 ml. Since the size of the phial for both the packings is the same and the sample packing is not distinctive at a glance, the differences from normal trade packing are not adequate to qualify such clinical samples for exemption under Notification 48/77. He further sated that the Tribunal's order in M/s. Indian Drugs and Pharmaceuticals v. CCE- 1987 (31) ELT 829 (Tribunal) = 1987 (13) ECR 85 is relevant and applicable to this case.

3. Ld. Counsel for the respondents submitted that there has been no deviation from the directions contained in the said notification. The physician samples are being packed since the introduction of the Notification 48/77 but so far there have been no case where the packing of the physician samples have been questioned. The Clause (ii) of the 1st Provision of the Notification 48/77 only stipulates that the duty free samples should be intended for free supply to the hospitals, nursing homes and medical practitioners. There is no directions anywhere for keeping any record for such free distribution or to maintain any specific staff for the free distribution. It is obligatory on the manufacturer who clears physician samples to distribute it free of any charge in accordance with the directions of the said notification. The respondents have already submitted a copy of the contract entered with M/s. Dey's Medical Stores sale promoter of the firm for the purpose. They perform the free distribution of samples on the respondents behalf through their medical representatives. The conditions of the contract, which is a duly registered document, has to be relied upon unless and until any specific proof of deviation is detected. Not a single evidence has been put forth in support of the allegations which is only based on presumption. It is also submitted that the packing of Entrofuran-M is in total consonance with the spirit, directions and provisions of the Notification 48/77 and there had been no contravention so far. The word 'PACKING' is incorrectly been interpreted to mean the container or the label etc. instead of the contents of the medicines packed in the container. The word 'PACKING' mentioned in the