Retail sale price valuation of medicines to institutional buyers warranted partial pre-deposit and stay of recovery pending appeal.

Valuation of medicines cleared to institutional buyers under retail sale price-based assessment under section 4A of the Central Excise Act, 1944, read with the Drugs (Price Control) Order, was held to require detailed examination at final hearing. The Tribunal found the limitation plea arguable for part of the disputed period and considered the applicability of retail sale price valuation to hospital clearances as a prima facie issue. Balancing that case on merits against the hardship pleaded, it ordered a partial pre-deposit and granted stay of recovery for the balance pending disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery pending disposal of the appeal.

Analysis: The demand arose from valuation of medicines cleared to institutional buyers on the basis of retail sale price under section 4A of the Central Excise Act, 1944, with reference to regulation 15 of the Drugs (Price Control) Order and the CBEC circular relied on by the appellant. The Tribunal found the limitation plea arguable for part of the period and noted that the merits of applicability of retail sale price to clearances made to hospitals required detailed examination at final hearing. Balancing the prima facie case and the hardship pleaded, it directed partial deposit and granted protection for the balance amount.

Conclusion: The appellant was granted partial waiver of pre-deposit on compliance with the directed deposit, and recovery of the balance amount was stayed pending disposal of the appeal.

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