Transaction value governs sold medicaments; Rule 4 valuation was prima facie inapplicable, securing interim stay of duty and penalties.

For interim relief, medicaments sold to buyers were treated as prima facie assessable on transaction value under Section 4(1)(a), not under Rule 4 of the Central Excise Valuation Rules, because the cited High Court distinction applied to goods actually sold and delivered rather than physician's free samples. On that basis, the differential duty demand on sold goods was viewed as unsustainable at the interim stage. As duty on free samples had already been paid, the related penalty also merited protection. Waiver of pre-deposit and stay of recovery were granted for the duty demand on sold goods and the connected penalties, including the penalty relating to free samples.

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Issues: Whether, for the purposes of interim relief, the duty demand on medicaments sold to buyers could prima facie be sustained under Rule 4 of the Central Excise Valuation Rules instead of valuation on transaction value under Section 4(1)(a) of the Central Excise Act, 1944, and whether pre-deposit and recovery of the consequential demand and penalty should be stayed.

Analysis: The goods in dispute were admittedly sold by the assessee to customers. The cited High Court decision distinguished between physician's free samples and goods sold and delivered at the time and place of removal, and indicated that in the latter situation valuation is governed by transaction value. On that basis, the demand of differential duty under Rule 4 was viewed as prima facie unsustainable for the sold goods. Since duty on free samples had already been paid, the corresponding penalty also warranted interim protection.

Conclusion: Waiver of pre-deposit and stay of recovery were granted in respect of the duty demand on goods sold by the assessee and the corresponding penalty, as well as the penalty relatable to the free samples.

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