TaxTMI 
TaxTMI 
2017 (2) TMI 315
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....are not challenging the valuation of the goods cleared by them on job work basis. However, they are challenging the penalty imposed. In all four appeals, the appellants were manufacturing physicians samples on job work basis and sending the same to the principal manufacturer, who was distributing the same free of cost. They were valuing the goods at 110% of the cost of production. Revenue demanded duty on value arrived at on the basis of Rule 4 of the Central Excise Valuation Rules on pro rata basis, based on the value arrived at under Section 4A for other similar goods. The demands were confirmed by the lower authorities. Aggrieved by the said order, the appellants are before the Tribunal. 2. Learned Counsel for the appellant argued that ....
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....ex Court in the case of Sun Pharmaceuticals (supra). The Hon'ble Apex Court in the case of Sun Pharmaceuticals has observed as follows: 10. As mentioned above, the assessee had put up the defence that since physician samples were not meant for sale by distributors but were to be given free of cost to the physicians, the assessee had charged lesser price. This statement of the assessee had not been doubted. The only reason in the show cause notice given was that since the physician samples were given free of cost by the distributors and no price was charged, the case was not covered by the provisions of Section 4(1)(a) of the Act. This is clearly fallacious and wrong reason. The transaction in question was between the assessee and the dist....
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.... to the facts of the case as in those cases the manufacturers themselves manufacturing the physician samples and distributing the same to Physicians/Doctors free of cost, therefore no transaction value was available. It is an admitted fact that P&P medicaments are to be cleared on MRP basis value therefore on those cases it was held as valuation of physician samples is to be on the basis of MRP basis under Section 4A of Act. 7. In this case, it is clear that the appellant is not clearing these physician samples to the Physician/Doctor free of cost but the appellant is clearing these physician samples on transaction value arrived at after including cost of raw materials + job charges as held by the Hon'ble Apex Court in the case of Ujagar ....