TaxTMI 
TaxTMI 
2019 (3) TMI 786
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....the appellants are liable to pay Central Excise Duty on physician samples which they had sold to their distributors on the basis of transaction value under section 4A of Central Excise Act, 1944. The appellants herein are engaged in the manufacture of P & P medicines falling under Chapter 30. They were issued show cause notices proposing recovery of Central Excise Duty invoking the extended period of time and proposing penalties under section 11 AC of Central Excise Act, 1944. Ld. Counsel submits that they manufacture pharmaceuticals both on their own account and as job workers. As they are a small manufacturers they cannot afford to supply physician samples free of cost. However, their Dealers and Distributors find it necessary to distribu....
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....oth on merits and on limitation. 4. Ld. DR reiterates the findings of the first appellate authority. He draws the attention of the Bench to paras 9 to 12 of the impugned order in which he clarified the reasons for not accepting the contentions of the appellant as follows: (i) The purchase orders which were presented before him had the invoices which did not indicate that they were physician samples and not for sale. (ii) There is no cross reference between the invoices and payments as indicated in the Ledgers. He concluded that physician samples were actually not being sold but were distributed free to their Distributors. He however observed that appellant was statutorily prohibited from selling physician samples under Rule 65(18) and Ru....
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....ri Formulations Pvt. Ltd. detailing the payments made with respect to invoices covering physician samples. 7. We find that this question as to how to value physician samples which are sold and not supplied free was answered in the case of Parnax Lab. Pvt. Ltd. vs. CCE, Vapi [2012(278) E.L.T. 95 (Tri.-Ahmd.)] (in which one of us Shri M.V. Ravindran was a Member), paras 7 to 9 of this order are reproduced: "7. As regards the physician samples manufactured by the appellant for other principals and sold the same to them under contractual obligations, it is seen that the said contracts have not been challenged by the Revenue in the proceedings initiated by the show cause notice. It is also noticed that the transaction value which has been decl....
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....(S.H. KAPADIA) New Delhi, sd/- ......................... (AFTAB ALAM) July 27, 2009 8. It can be said that the ratio laid down by the Bench for the case of M/s. Sidmak Laboratories (I) Ltd. is upheld by the Apex Court hence we are of the considered view that the demand of the duty liability on the physician samples sold by the appellant to the principals, the assessable value as ascertained by the assessee and the duty liability discharged is correct and there is no reason for recalculating the assessable value based upon the value arrived at on pro rata basis of sales pack. 9. As regards the physician samples manufactured and cleared by the appellant of their own product, we agree with the learned DR that on merits the issue is cove....