2001 (3) TMI 428

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....session on Notfn. of Govt. of India in the Ministry of Finance (Department of Revenue and Insurance) No. 117/66-C.E., dated 16th July, 1966, the Central Government hereby exempts patent or proprietary medicines, falling under heading No. 30.03 of the schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and supplied directly from the factory of the manufacturer to Government Department including Railways, local bodies and hospitals from so much of the duty of excise leviable thereon as is in excess of 15% of the value calculated on the basis of price excluding Central Excise duty fixed under the terms of relevant contract between the parties for supply". 2. The grounds taken in appeal are :- "(i) Commissioner of Custom....

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....e goods were sold at much lesser price. The reason was that there was no provision under the old Section 4 for providing assessment on contract price. It is precisely to get over this difficulty and also to give a legal backing to the lower contract prices, when sold directly to Hospitals, etc., the scheme envisaged under Notification No. 117/66 was brought into force. However, even after new Section 4 was introduced, with effect from 1-10-1975 at which time Part II Price List was introduced to take care of contract price for assessment, the Government thought it fit to continue exception of charging the duty on the value over and above the contracted price vide Notification No. 45/82, even though such a contingency was taken care of, by ne....

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....f Central Excise (Appeals), also misinterpreted and did not correctly consider that if the Government wanted to allow exemption of 15% of value they could have very well worded the notification so as to read as :- "In excess of the amount of duty calculated on the basis of the value of said medicines arrived at, after allowing an abatement of 85% of the price excluding excise duty". which precisely are the very words employed in Notification No. 245/83 wherein a discount of 15% was allowed from the retail price. Thus, it was never intended by the Government that the exemption benefit in this Notification No. 45/82 is by reducing the value to the extent of 85% i.e., resorting to reducing the assessable value by 85% and then paying duty....