2017 (11) TMI 9

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....ncerning valuation of (a) physician samples cleared for free distribution and (b) cleared on sale on principal to principle basis. Duty was demanded for the extended period along with interest and penalty equal to duty was imposed. The period involved is 2005-06 to 2007-08 (up to Dec 2007). 2. Department relies on CBEC Circular No.813/10/2005-CX dated 25.04.2005 according to which valuation of free samples are to be determined under Rule 4 of the Valuation Rules, 2000. Appellants cleared physician samples for free distribution under Section 4(1)(a) of the Act and adopted a notional value for payment of duty. Department took the view that since the goods are meant for free distribution transaction value under Section 4(1)(a) cannot be ado....

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....ssessable value and not pro rata basis. Cited below are few decisions: (a) CCE Vs Sidmak Laboratories India Ltd., [2009 (242) ELT 255 (Tri-Ahmd)] (b) CCE Vs Sidmak Laboratories India Ltd., [2011 (270) ELT A90 (SC)] affirming the above decision) (c) Gelnova Laboratories Pvt Ltd., Vs CCE [2014 (300) ELT 437 (Tri-Mumbai)] (d) Softsule Pvt Ltd., Vs CCE, Mumbai [2011-TIOL-1439-CESTAT-Mumbai] (e) Allianz Bio Sciences Pvt Ltd., Vs CCE, Puduchery [2012 (283) ELT 284 (Tri-Chennai) (f) Omni Protech Drugs Pvt Ltd., Vs CCE [2011 (274) ELT 377 (Tri-Mumbai)] (g) Mayer Health Care Pvt Ltd., Vs CCE [2009 (247) ELT 488 (Tri-Bang)] (iii) Though the contention of the revenue that in case ....

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....988. The very issue was addressed by the Larger Bench in the case of Cadila Pharmaceuticals Ltd., [2008 (232) ELT 245 (Tri-LB)] where it was held that physician samples being final product not supplied for captive consumption under Rule 8 of Valuation Rules is not applicable and Rule 4 ibid only would be applicable to such goods. This decision was followed in a number of other Tribunal decisions for ex: Allianz Bio Sciences Pvt Ltd., Vs CCE, Puduchery [2012 (283) ELT 284 (Tri-Chennai)] and Hetero Drugs Ltd., the same appellant here, in Final Order No. 21675-21697 of 27.07.2015 and again followed in Hetero Drugs Ltd., [2016-TIOL-2252-CESTAT-HYD]. This being so, the adoption of appellant on a notional value for payment of duty on the physicia....

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....pugned period there were clearly two views on the manner and method of valuation of physician samples supplied for free distribution. In such a scenario as held by the Tribunal on identical issue, in case of Ronald Pharmaceuticals Pvt Ltd., [2013 (298) ELT 104 (Tri-Ahmd)], the penalty cannot be imposed. The relevant portion of that order is reproduced below: "3. After hearing both the sides on the merits of the case, we find that a small point needs to be decided by us is whether the appellant is required to be visited with penalty under Rule 25 of the Central Excise Rules, 2002 for not discharging the duty liability on the P & P Medicaments, cleared by them by applying pro-rata value of sale pack cleared by them. It is undisputed ....