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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether medicaments supplied to Government institutions and institutional buyers, bearing the marking "NOT FOR SALE" and without any printed retail sale price, are liable to valuation under Section 4A of the Central Excise Act, 1944 or under Section 4 of that Act.
Analysis: The dispute was confined to the valuation mechanism applicable to supplies made to hospitals, railways and similar institutional buyers. The goods were not sold in retail and the packages did not carry any MRP. The decision turned on the scope of Section 4A of the Central Excise Act, 1944 and the related requirement under the Drugs (Prices Control) Order, 1995 to display retail price only in respect of formulations intended for retail sale. Since the supplies were meant for institutional consumption and not for retail sale, the condition for application of Section 4A was not satisfied. The Tribunal followed its earlier consistent view that such clearances are to be valued on the basis of Section 4.
Conclusion: The goods were not assessable under Section 4A of the Central Excise Act, 1944 and were liable to be valued under Section 4; the demand based on Section 4A could not be sustained.
Ratio Decidendi: Medicaments supplied to institutional buyers for consumption and not for retail sale, where no retail sale price is required to be displayed, are not subject to valuation under Section 4A of the Central Excise Act, 1944.
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