1983 (4) TMI 258 - AT - Central Excise

Tribunal values bulk packs based on retail price, grants relief.

The Tribunal ruled in favor of the appellants, holding that bulk packs should be valued based on the listed retail price for bulk packs, as per ... - Issues:Interpretation of exemption Notification No. 161/66-C.E. and clause 18 of the Drugs (Prices Control) Order, 1970.Analysis:The case involved the interpretation of Notification No. 161/66-C.E. and clause 18 of the Drugs (Prices Control) Order, 1970. The Notification provided an ad hoc discount procedure for valuing patent or proprietary medicines for central excise duty assessment. It offered two options for valuing goods: wholesale price less 10% discount or retail price less 25% discount. The appellants chose the latter. The Department marked up retail prices of bulk packs by 5% under clause 18. The appellants contended that the mark up was for dealers selling split quantities, not for manufacturers, and it was not authorized by the Notification. They cited a High Court ruling against a similar demand based on a tariff ruling. The Department argued that the mark up was lawful as the retail prices represented the actual selling price after the mark up.During the hearing, the appellants argued that the mark up was solely for dealers selling split quantities, and no part of it accrued to them as manufacturers. They emphasized that the mark up was not authorized by Notification No. 161/66-C.E. The Department's representative defended the mark up, stating it was lawful as the retail prices reflected the actual selling price after the mark up. The Tribunal noted that goods had to be valued as presented for assessment at clearance. It clarified that the mark up was intended for dealers selling split quantities, and they retained the mark up amount. The Tribunal found no authority to apply the mark up to bulk packs for valuation. It held that goods cleared as bulk packs should be valued based on the listed retail price for bulk packs.The Tribunal ruled in favor of the appellants, stating that the bulk packs should be valued according to the listed retail price at which they would be sold as bulk packs. The appeal was allowed with consequential relief to the appellants.