2016 (11) TMI 13

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....on 4A of the Central Excise Act, 1944. The dispute relates to valuation of physician samples cleared by the assessee during the period 25.4.2005 to 31.10.2005. The original authority vide his order dated 13.3.2007 demanded Central Excise duty to the extent of Rs. 28,31,993/- along with interest and imposition of penalty of equal amount. Further, he imposed a penalty of Rs. 1,00,000/- under Rule 25 of the Central Excise Rules. When the said order was challenged, the Commissioner (A) set aside the Order-in-Original. Hence, Revenue is in appeal. 2. Heard Smt. Ezhilmathi, learned AR for the Revenue and Shri Aravind, learned CA on behalf of the respondent. 3. It is the submission of the learned DR that physician samples have been manufactured ....

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....o been echoed in the following cases: (i) Blue Cross Laboratories Ltd.: 2006 (202) E.L.T. 182 (Tri.-LB) (ii) Cadila Pharmaceuticals Ltd.: 2008 (232) E.L.T. 245 (Tri.-LB) (iii) Allianz Bio Sciences Pvt. Ltd.: 2012 (283) E.L.T. 284 (Tri.-Chennai) She finally prays that the Commissioner (A) s order which has set aside the original authorities order and has upheld the assessee s practice of paying duty on the basis of cost construction as per CAS-4 standards. 5. Learned CA, on the other hand submitted that the Hon'ble Bombay High Court s judgment in the case of Indian Drugs Manufacturer s Association (supra) has been delivered in the contest of physician samples supplied free of cost to the doctors. He submits that this is not the contr....

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.... in both the above cases needs to be done in terms of CBEC Circular dated 25.4.2005 which requires valuation to be done on the basis of Rule 4 of the Valuation Rules. On this basis, the samples have to be valued proportionately to that of the trade packs (which are sold on MRP) of the same medicines. Revenue has also relied upon the decision of the Hon'ble Bombay High Court and other cases. We have seen the judgments cited by the learned DR. The Hon'ble Bombay High Court s judgment has been delivered on a challenge by the Indian Drugs Manufacturer s Association to the CBEC Circular dated 25.4.2005. The Hon'ble Bombay High Court upheld the Circular, however, the facts of the case clearly indicate that it has dealt only with the physician sam....

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....of excisable goods. When we find that price was charged by the assessee from the distributors, the show cause notice is clearly founded on a wrong reason. The case would squarely be covered under the provisions of Section 4(1)(a) of the Act. In view thereof, the Central Excise Rules would not apply in the instant case. 11. As a result, we are of the opinion that the decision dated 10-11-2006 rendered by the CESTAT depicts the correct position of law and rightly holds that the case would be covered by the provisions of Section 4(1)(a) of the Act and in view thereof Rule 6(b)(ii) of the Rules would not apply. Resultantly, Civil Appeal Nos. 3742-3744 of 2007 of the Revenue fail and are hereby dismissed. C.A. No. 6984/2009; C.A. No. 9876-98....