Excise on lab samples

In manufacturing entity - 250 grams of sample taken (from 1 MT batch) for laboratory testing. This sample becomes obsolete after testing. Whether excise duty is to be paid on these lab samples
Replies (3)

sample will be liable to duty as testing is considered as a part of mfg irrespective if a part was tested,,

 

Correct that testing is part of manufacturing. But we have not sold that part. Part has been consumed in testing. Not gone outside the factory gate. On what logic excise law makes it taxable.

Whether input credit available if any how we have to pay excise duty of laboratory samples.

Logic 

as before the lab testing and ceretification, the goods manufactured does not qualify for marketing, hence the DSA ( earlier RG-!) stock account entry should be made on the actual marketable quantity. so before testing the goods, the goods are not finish and considered as semi finish or work in progress. 

lab testing means goods "random sampling" and subject to approval / rejection before entering in DSA ( daily stock account) 

any semi finish product taken out testing which does not have any market value, should be considered as waste / scrap under captive consumption. 

However if it is traceable from accounting system that such scrapped goods were accounted for manufacture and did not got sold ( even at reduced  scrap value) then input credit on inputs used in such scrap quantity would not be available

 

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