2017 (3) TMI 220

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....r appeal which, having been remanded by the Tribunal, were both disposed off by common order-in-appeal no. AT/481-482/Bel/2005 dated 22^nd September 2005 of Commissioner of Central Excise (Appeals), Mumbai Zone-II. 2. Dispute relates to valuation of special packing used for 'physician samples' (distributed free of cost) which was alleged to have been deliberately excluded from the assessable value adopted for clearance; the assessable value was, admittedly, computed as a proportion of the value of traded 'polybion' and 'neurobion' even though these goods were cleared in normal packing. Appellant submits that the value of special packing is included in the overall cost of production of the traded goods and adoption of proportionate value ....

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....t to be taken into consideration. 6. Learned Counsel for appellant drew our attention to the decision of the Hon'ble Supreme Court in Biochem Pharmaceuticals Ind Ltd v. Commissioner of Central Excise, Vapi [2015 (322) ELT 808 (SC)] and, in particular, to '7. Thus, to arrive at valuation under this Rule, the proper officer may adopt the principles contained in Rule 6(b). Rule 6(b) deals with two methods : (i) In case these are comparable goods, the value of comparable goods produced or manufactured by the assessee, can be the basis and thus pro rata method can be applied; (ii) In case aforesaid method can't be applied, then the second method can be resorted to viz. cost of production or manufacture including profits, ....

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....e that the samples are not comparable with traded goods as far as packing is concerned, costing should have been adopted for computation of assessable value. In the show cause notice, the value of the special packaging used for samples of 'polybion' and 'neurobion' tablets has been computed at Re 1.06 and Re. 0.83 per sample. We observe that this is inclusive of margin of profit which, considering the purpose to which samples are distributed, is not tenable. We also notice that the cost of packaging of normal sample, which, obviously, is included in the pro rata price on which duty has been paid has not been deducted to arrive at the differential duty. On the contrary, appellant contends that cost of the special packaging and the normal pac....