Valuation u/r 4 of CE valuation rule

[Nitin Bhisikar]

Valuation under rule 4 of CE valuation rule- Manufacturer of medicine sold free sample to medical practitioner throught its medical representative. Here time of delivery is other than time of removal of goods. As per rule 4 adustment is required with reference to comparable goods sold nearest to time of removal. My Query is 1) Which adjustment is required in the present case if article is specified in section 4A. 2) Which adjustment is required in the present case if article is not specified in section 4A. 3) Which adjustment is necessary if it is not free sample but sale to buyer under the promotional scheme if article specified in section 4A 4) Which adjustment is necessary if it is not free sample but sale to buyer under the promotional scheme if article not specified in section 4A. Here the difference in time because material is removed from factory but never reaches to the buyer immediately because buyer is not known at the time of removal. Material may reach to buyer through medical practioner or medical representative.

AI Summary

Clarification on valuing free medicine samples under Rule 4; distinction between delivery and removal times questioned. A forum participant inquired about the appropriate adjustments for valuing free samples of medicine under Rule 4 of the Central Excise valuation rules, particularly when the delivery time differs from the removal time. The questions focused on adjustments needed if the article is specified or not in Section 4A, and how these adjustments change if the transaction involves promotional sales instead of free samples. A respondent clarified that the distinction between delivery and removal should not be artificially made. They suggested treating doctors as consignment agents or depots might change the valuation approach, emphasizing that free samples do not constitute consignment.