2022 (7) TMI 351 - AT - Central Excise

Tribunal rules medicaments for hospitals not subject to MRP assessment under Central Excise Act

The tribunal ruled in favor of the appellant, holding that medicaments supplied to institutional buyers for hospital use, marked 'Not for sale/Hospital ... Valuation - medicaments supplied by the Appellants to institutional buyers like Indian Railways, ESI, BHEL, SAIL etc for their own use in the hospitals run by them - no retail sale by these institutions to their patients and these supplies are for exclusive use by such institutions by providing treatment to their patients - Requirement to affix MRP on these goods and assess the same on MRP basis under Section 4A of the Central Excise Act, 1944 - HELD THAT:- In the present case there is only difference of period i.e. for the period November 2015 to September 2016 in respect unit 1 and January 2014 to March 2016 in respect of unit 2. It is found that in respect of both the unit for the period January 2005 to May 2013 and March 2010 to February 2013 this tribunal vide order dated 28.06.2019 [2019 (10) TMI 810 - CESTAT AHMEDABAD] set aside the demand on the identical issue and in the same set of facts. This order was accepted by the department and no further appeal was filed. Moreover, for the subsequent period in respect of unit 1 and 2 for the period June 2013 to October 2015 and March 2013 to December 2013 respectively, demand was set aside by the Additional Commissioner vide OIO dated 30.01.2020. The said orders were also accepted by the department and no further appeal was filed. From the decision of this Tribunal it can be seen that except difference of the period entire facts of the case is identical. Therefore the issue is no long res-integra. The demand in the present case also is not sustainable hence the impugned orders are set side - appeal allowed. Issues Involved:1. Valuation of medicaments supplied to institutional buyers without retail sale.2. Applicability of MRP-based assessment under Section 4A of the Central Excise Act, 1944.3. Consistency with previous tribunal decisions and res judicata.Issue-wise Detailed Analysis:1. Valuation of Medicaments Supplied to Institutional Buyers Without Retail Sale:The core issue revolves around whether medicaments supplied by the appellant to institutional buyers like Indian Railways, ESI, BHEL, and SAIL, which are marked 'Not for sale/Hospital supply not for sale,' should be assessed based on the Maximum Retail Price (MRP). The institutional buyers use these medicaments in their hospitals either free of cost or at a nominal charge, and there is no retail sale involved.2. Applicability of MRP-based Assessment Under Section 4A of the Central Excise Act, 1944:The Revenue contended that the appellant was required to affix MRP on these goods and assess them on an MRP basis under Section 4A of the Central Excise Act, 1944. The Adjudicating Authority confirmed the demand, which was upheld by the Commissioner (Appeals). However, the appellant argued that the issue was already settled in their favor in previous tribunal decisions, specifically in the tribunal's final order dated 28.06.2019 (2019 (10) TMI 810 CESTAT AHMEDABAD), which was accepted by the department without further appeal. The tribunal in the previous case had held that supplies intended for consumption by institutional buyers in their hospitals and not intended for retail sale are not liable to be assessed under Section 4A.3. Consistency with Previous Tribunal Decisions and Res Judicata:The tribunal noted that the issue had already been decided in the appellant's favor for earlier periods, and the department had accepted those decisions without further appeal. The tribunal cited its previous order dated 28.06.2019, which set aside the demand for the periods January 2005 to May 2013 and March 2010 to February 2013, and the Additional Commissioner's order dated 30.01.2020, which set aside the demand for subsequent periods. The tribunal emphasized that the facts of the present case were identical except for the period involved, making the issue res judicata.Conclusion:The tribunal concluded that since the issue had already been settled in favor of the appellant in previous identical cases and accepted by the department, the present demands were not sustainable. The tribunal set aside the impugned orders and allowed the appeals, reinforcing that medicaments supplied to institutional buyers for use in their hospitals, marked 'Not for sale/Hospital supply not for sale,' are not subject to MRP-based assessment under Section 4A of the Central Excise Act, 1944.Final Order:The tribunal pronounced the decision in the open court on 07.07.2022, setting aside the impugned orders and allowing the appeals.