Valuing physician samples for duty assessment under Central Excise Act: Tribunal clarifies

The Appellate Tribunal CESTAT MUMBAI addressed the issue of valuing physician samples for duty assessment under Section 4(1)(a) or Section 4A of the Central Excise Act. The Tribunal held that physician samples, manufactured and sold on a principal to principal basis, should be assessed under Section 4(1)(a) as they are not intended for sale and do not require displaying retail prices. The appeals filed by the assessees were allowed, and those filed by the Revenue were dismissed.

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Issues involved: Valuation of physician samples for duty assessment u/s Section 4(1)(a) or Section 4A.

Summary:
The Appellate Tribunal CESTAT MUMBAI addressed a common issue involving five appeals related to the valuation of physician samples manufactured by the assessees and sold to brand name holders on a principal to principal basis. The period in question was from 1-4-2005 onwards, coinciding with the introduction of MRP based assessment for P & P Medicaments. The key question was whether these samples should be assessed to duty u/s Section 4(1)(a) or Section 4A.

The Tribunal referred to a previous judgment in the case of M/s. Gelnova Laboratories (I) Pvt. Ltd. v. Commissioner of Central Excise, Belapur, where it was established that P.P. Medicaments are covered by Section 4A of the Central Excise Act, 1944. The Tribunal noted that the requirement of displaying the retail price is only for goods intended for sale, and since physician samples are not intended for sale, the need to indicate the retail sale price does not apply. Additionally, the Tribunal had consistently held the view that physician samples manufactured on a principal to principal basis should be assessed under Section 4(1)(a) of the Central Excise Act.

Consequently, the appeals filed by the assessees were allowed, while those filed by the Revenue were dismissed.

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