Valuation of physician samples after excisability finding remitted for fresh Tribunal determination under excise valuation rules.

After free physician samples were treated as excisable, the valuation question remained unresolved because the Tribunal had not examined the correct basis for pricing. The Supreme Court noted that the record did not show any determination of whether the samples should be valued pro rata under the Central Excise Act and the 1975 Valuation Rules, or on some other basis. The proper course was therefore to remit the valuation issue to the Tribunal for fresh adjudication under the applicable valuation provisions.

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Issues: Whether, after the goods were held excisable, the price of physician samples supplied to doctors was to be worked out on a pro rata basis under Section 4(1)(b) of the Central Excise Act read with Rule 7 and Rule 6(b) of the Central Excise (Valuation) Rules, 1975, or on some other basis.

Analysis: The question of excisability of free medical samples was treated as having been answered by an earlier decision rendered the same day. On the valuation issue, the existing record showed that the Tribunal had not examined how the samples were to be valued after proceeding on the footing that the goods were excisable. The matter therefore required adjudication at the Tribunal level on the correct valuation method, including whether the pro rata method under the cited valuation provisions applied.

Conclusion: The valuation issue was remitted to the Tribunal for fresh decision.

Ratio Decidendi: Where an issue of valuation remains undecided after a finding on excisability, the proper course is to remit the matter for determination under the applicable valuation provisions.

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