2018 (2) TMI 1005 - AT - Central Excise

Valuation of Physician Samples for Central Excise Duty: Section 4(1)(a) Prevails

Shwarde Pharmaceuticals Pvt. Ltd., Versus Commissioner of Central Excise, Goa

The Tribunal held that the valuation of physician samples for charging Central Excise duty should be under Section 4(1)(a) instead of Section 4(1)(b) due ... Valuation - physician samples - Section 4(1)(a) of CEA - Held that: - Section 4 (1) (b) can be made applicable only when there is no sale value is available - As per the fact of the present case there is no dispute about the nature of the transaction, i.e. sale of goods on principal to principal basis, provisions of Section 4 (1) (b) is not applicable - appeal allowed - decided in favor of appellant. Issues: Valuation of physician samples for charging Central Excise duty under Section 4(1)(a) vs. Section 4(1)(b).Analysis:1. The case involved the appellants engaged in manufacturing and selling physician samples for the brand name owner on a principal to principal basis. The issue at hand was the valuation of these physician samples for charging Central Excise duty, specifically whether the value should be adopted under Section 4(1)(a) or Section 4(1)(b).2. The appellant's counsel argued that the transaction value under Section 4(1)(a) should be applicable for charging Central Excise duty on the sale of physician samples. The counsel relied on various judgments to support this position, including Sun Pharmaceuticals Inds Ltd., Cosme Remedies Ltd., Emil Pharmaceuticals Inds. Pvt. Ltd., and Gelnova Laboratories (I) Pvt. Ltd.3. The Assistant Commissioner representing the Revenue reiterated the findings in the impugned order, which sought the valuation of physician samples sold under Section 4(1)(b).4. After considering the submissions from both sides, the Tribunal found that since the appellant had sold the physician samples to the brand name owner on a principal to principal basis, the correct value application was under Section 4(1)(a). The Tribunal emphasized that Section 4(1)(b) could only be applied when no sale value is available. Given the nature of the transaction in this case, i.e., sale of goods on a principal to principal basis, the provisions of Section 4(1)(b) were deemed inapplicable. Relying on the judgments cited by the appellant's counsel, the Tribunal concluded that the issue was no longer res integra. Consequently, the impugned order was set aside, and the appeal was allowed.5. The judgment was pronounced in court on 29/12/2017 by Mr. Ramesh Nair, Member (Judicial), and Mr. Raju, Member (Technical).