Excise valuation of free physician samples follows comparable wholesale goods, with no further adjustment where size differences are already reflected.

Physician's free medicine samples were valued by reference to comparable wholesale sale goods under Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975. The relevant test was comparability of the goods and their material characteristics, not the identity of the recipient or the fact that the samples were supplied free of cost. Smaller pack sizes could justify adjustment only if a real value difference remained, but the wholesale benchmark already reflected that difference. The absence of a sale price or profit motive in the supply of samples was treated as irrelevant to valuation, and no further adjustment was required.

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Issues: Whether physician's free samples of medicines were to be valued on the basis of comparable wholesale sale goods under Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975, and whether any further adjustment was required because the samples were supplied free of cost and usually in smaller quantities.

Analysis: The dispute concerned valuation under Rule 7 by applying the principles of Rule 6(b). The determining factor was the comparability of the goods, not the identity of the buyer or the nature of the transaction. The goods sold in the wholesale market and the physician's samples were held to be comparable, subject to reasonable adjustment for differences in quantity and material characteristics. The smaller bulk of the sample packs was treated as a relevant factor, but the adopted wholesale value already allowed for that difference. The absence of sale price or profit motive in the supply of samples was held to be irrelevant to valuation, since the supply of samples served a promotional purpose and the broad scheme of Rule 6(b)(i) governed the case.

Conclusion: The physician's free samples were rightly valued with reference to comparable wholesale sale goods under Rule 6(b)(i), and no further adjustment was warranted.

Ratio Decidendi: For excise valuation, comparability turns on the goods and their material characteristics, not on whether they are sold or supplied free to different recipients, and reasonable adjustment is required only where a real difference affecting value remains unaddressed.

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