Physician samples sold at factory gate must be valued at actual sale price; pro rata commercial pack valuation is inapplicable.

Physician samples sold to wholesale distributors at the factory gate were correctly valued under Section 4(1)(a) of the Central Excise Act on the actual sale price, because a normal price was available and the sale price was the sole consideration. Pro rata valuation by reference to commercial packs was inapplicable where the samples were not cleared free of cost. The Revenue's challenge to the assessable value therefore failed, consistent with the earlier decision in the same parties' matter and distinguished from the Larger Bench ruling on free samples.

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Issues: Whether physician samples cleared on payment of duty were liable to be valued under Section 4(1)(a) of the Central Excise Act, 1944 on the basis of the actual sale price, and whether pro rata valuation on the price of commercial packs could be applied.

Analysis: The assessable value of physician samples depends on whether a normal price is available under Section 4(1)(a). Where the samples are admittedly sold to wholesale distributors and the sale price is the sole consideration, that price constitutes the proper assessable value. A pro rata comparison with commercial packs is not warranted when the samples are not cleared free of cost and the factual matrix shows actual sales at the factory gate. The earlier decision in the same respondents' case had already applied this principle and distinguished the Larger Bench ruling dealing with free samples.

Conclusion: The physician samples were correctly valued on the basis of their actual sale price under Section 4(1)(a), and the Revenue's challenge to the valuation failed.

Final Conclusion: The appeal was rejected because the disputed valuation issue had already been decided in favour of the assessee's method of assessment.

Ratio Decidendi: Where physician samples are sold and a normal price exists, their assessable value must be taken under Section 4(1)(a) on the actual sale price, and pro rata valuation based on commercial packs is inapplicable.

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