TaxTMI 
TaxTMI 
2024 (6) TMI 440
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....In case of sale meant for institution, the appellant are not affixing the MRP and the valuation of the same is done on the basis of section 4 i.e. on the transaction value. The case of the department is that the entire sale i.e. whether sale in retail or for institution should be covered under by Section 4A for the valuation purpose accordingly, with this contention, the differential duty demand was raised in the show cause notices. There is another small issue i.e. demand of cenvat credit in respect of removal and retention of control samples. The appellant have not contested the duty demand on this amount, however due to diversion views, they pray to set aside the penalty. All the show cause notices have been adjudicated and demands were confirmed against the appellant. Being aggrieved by the orders-in-original, the appellant filed appeals before the Commissioner (Appeals) who affirmed the view of the adjudicating authority and rejected all the appeals. Therefore, the present appeals before this Tribunal. 2. Shri R.C. Saxena, learned counsel appearing on behalf of the appellant submits that since the sale for institution is not a retail sale but the same is for consumption by ....
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....se of the powers conferred by sub-section (1) and sub-section (2) of section 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby specifies the goods mentioned in column (3) of the Table below and falling under Chapter or Heading No. or Sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) mentioned in the corresponding entry in column (2) of the said Table, as the goods to which the provisions of the said sub-section (2) shall apply, and allows as abatement the percentage of retail sale price mentioned in the corresponding entry in column (4) of the said Table :- TABLE S. No. Chapter or Heading No. or Sub-heading No. Description Abatement as a percentage of retail sale price (1) (2) (3) (4) 1. 3003. 10 Patent or proprietary medicaments, other than those medicaments which are exclusively Ayurvedic, Unani, Siddha, Homoeopathic or Biochemic 35% 2. 3003. 20 Medicaments (other than patent or proprietary) other than those which are exclusively used in Ayurvedic, Unani, Siddha, Homoeopathic or Biochemic systems 35% This notification 2. shall come into force on the 8th d....
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.... on the label of each smaller pack and such price shall not be more than the prorata retail price of the main pack rounded off to the nearest paisa." A perusal of the aforesaid provisions shows that the requirement of printing the MRP is in respect of products "offered for retail sale". Therefore, if the product is not offerred for retail sale, the said provision of Rule 14 & 15 will not apply. In the present facts and circumstances, we need to examine whether if the provisions of Rule 14 or 15 could be attracted. 4.1 It is seen that investigations were extended to various customers/ dealers and in para 9 of the impugned order the list of customers has been enumerated. The gist of the investigation is reproduced in para 10, 11, 12 and 13 of the impugned order. The investigations confirmed that no evidence of printing of MRP on institutional supplies made through dealers was found. In fact whatever evidence was produced showed that the products contained the marking "hospital supply-not for sale" only. 4.2 The impugned order has picked up the words "formulation intend for sale" appearing in para 14 and para 15 of the Drugs (Price Control) Order 1995 and co....
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....to sell the said formulations, he shall display, in indelible print mark, on the label of the container of the formation as well as on the minimum pack thereof offered for retail sale, the retail price or maximum retail price thereof." The argument in the impugned order being that the goods intended for ultimate sale to institutional buyers, are first sold to dealer/ distributors. Thus, when they are sold to dealers/ distributors the provision of DPCO 1995 get attracted. It is seen that the DPCO 1995 mandates, printing of 'retail sale price' on 'containers' as well as on 'minimum pack thereof offered for retail sale'. From above it is apparent that what is covered in DPCO is only the items which are sold in retail. If a container is sold in retail, the container must contain retail sale price and if the content of such container are also sold in retail then each such pack sold in retail must have the MRP printed on it. From above it is apparent that the provisions are attracted only on goods 'offered for retail sale'. In the impugned order, it is seen that the words 'offered for retail sale' appearing in DPCO 1995 have been overlooked. The said order only relies on the wor....
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.... and where the pharmaceuticals are intended for consumption in the hospitals and not for retail sale. Ld. Counsel has produced some certificates for various institutional buyers which confirm this fact. Revenue has not produced any evidence that the said goods are sold by the institutional buyers and similarly no evidence has been produced to assert that the said pharmaceuticals are not consumed in the hospitals by these institutional buyers themselves. In the case of USV Ltd., following has been observed: "4. We have gone through rival submissions. We find that these products were brought into the fold of section 4A assessment by notification No. 2/2005-CE(NT) dated 07.01.2005 which reads as under: "Medicaments - Assessments on basis of retail sale price (MRP)In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby specifies the goods mentioned in column (3) of the Table below and falling under Chapter or Heading No. or Sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) mentioned in the corresponding entry in column (2) of the sa....
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....15. Display of prices of non-Scheduled formulations and price list thereof: 1. Every manufacturer, importer or distributor of a non-Scheduled formulation intended for sale shall display in indelible print mark, on the label of container of the formulation and the minimum pack thereof offered for retail sale, the retail price of that formulation with the words "retail price not to exceed" preceding it "local taxes extra" succeeding it, and the words "Not under Price Control" on a green strip: Provided that in the case of a container consisting of smaller saleable packs, the retail price of such smaller pack shall also be displayed on the label of each smaller pack and such price shall not be more than the pro-rata retail price of the main pack rounded off to the nearest paisa. "A perusal of the aforesaid provisions shows that the requirement of printing the MRP is in respect of products "offered for retail sale". Therefore, if the product is not offered for retail sale, the said provision of Rule 14 & 15 will not apply. In the present facts and circumstances, we need to examine whether if the provisions of Rule 14 or 15 could be attracted.4.11t is seen that investigations were....
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....iner of the formulation & (1) On the minimum pack thereof offered for retail sale.4.3.4.1.5. What will be displayed thereon?: (i) retail price not to exceed" & local taxes extra applicable for scheduled formations & (ii) maximum retail price" (MRP) inclusive of all taxes in respect of non scheduledformulations.4.3.4.2.As discussed at para 4.3.4.1.1 4.3.4.1.5hereinabove I come to the conclusion that as and when a manufacturer or distributor or importer of scheduled or non-scheduled formulations intends to sell the said formulations, he shall display, in indelible print mark, on the label of the container of the formation as well as on the minimum pack thereof offered for retail sale, the retail price or maximum retail price thereof. "The argument in the impugned order being that the goods intended for ultimate sale to institutional buyers, are first sold to dealer/ distributors. Thus, when they are sold to dealers/ distributors the provision of DPCO 1995 get attracted. It is seen that the DPCO 1995 mandates, printing of retail sale price" on containers" as well as on minimum pack thereof offered for retail sale". From above it is apparent that what is covered in DPCO is only the ite....
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....ls are allowed. The similar issue has also been considered in the case of Zydus Healthcare Ltd (supra) wherein Tribunal has passed the following order: 4. We have carefully considered the rival submission. We find that the issue involved in this case relates to the applicability of assessment under section 4A to supplies of pharmaceuticals made for institutional buyers who are running hospitals and where the pharmaceuticals are intended for consumption in the hospitals and not for retail sale. Ld. Counsel has produced some certificates for various institutional buyers which confirm this fact. Revenue has not produced any evidence that the said goods are sold by the institutional buyers and similarly no evidence has been produced to assert that the said pharmaceuticals are not consumed in the hospitals by these institutional buyers themselves. In the case of USV ltd., following has been observed: "4. We have gone through rival submissions. We find that these products were brought into the fold of section 4A assessment by notification No. 2/2005-CE(NT) dated 07.01.2005 which reads as under: "Medicaments - Assessments on basis of retail sale price (MRP)In exercise....
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....il price not to exceed' preceding it, and "local taxes extra" succeeding it, in the case of Scheduled formulations. Provided that in the case of a container consisting of smaller saleable packs, the retail price of such smaller pack shall also be displayed on the label of each smaller pack and such price shall not be more than the pro-rata retail price of the main pack rounded off to the nearest paisa.15. Display of prices of non-Scheduled formulations and price list thereof: 1. Every manufacturer, importer or distributor of a non-Scheduled formulation intended for sale shall display in indelible print mark, on the label of container of the formulation and the minimum pack thereof offered for retail sale, the retail price of that formulation with the words "retail price not to exceed" preceding it "local taxes extra" succeeding it, and the words "Not under Price Control" on a green strip: Provided that in the case of a container consisting of smaller saleable packs, the retail price of such smaller pack shall also be displayed on the label of each smaller pack and such price shall not be more than the pro-rata retail price of the main pack rounded off to the nearest paisa. "A p....
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...., 1995, the following facts are extracted there-from; 4.3.4.1.1. Who is required to adopt it? : Every manufacturer or importer or distributor of a scheduled or non-scheduled formulation. 4.3.4.1.2. When are the said formulations intended for sale? 4.3.4.1.3 What action is required to be taken? : shall display in indelible print mark; 4.3.4.1.4. On which shall such action be taken?: (i) On the label of a container of the formulation & (1) On the minimum pack thereof offered for retail sale. 4.3.4.1.5. What will be displayed thereon?: (i) retail price not to exceed" & local taxes extra applicable for scheduled formations & (ii) maximum retail price" (MRP) inclusive of all taxes in respect of non scheduled formulations. 4.3.4.2. As discussed at para 4.3.4.1.1 4.3.4.1.5 hereinabove I come to the conclusion that as and when a manufacturer or distributor or importer of scheduled or non-scheduled formulations intends to sell the said formulations, he shall display, in indelible print mark, on the label of the container of the formation as well as on the minimum pack thereof offered for retail sale, the retail price or maximum retail price thereof. "The argument in the impugned order being....
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....Tribunal in the case of JB Chemicals & Pharmaceuticals Ltd. (supra) where the Tribunal has passed the following order: "4. We have carefully considered the submissions made by both the sides and perused the record. We find that the issue is not under dispute that whether the medicament supplied to institutional buyers i.e. Indian Railways, Government Hospitals, BHEL for their exclusive use should be valued under Section 4 and Section 4A of Central Excise Act, 1944. We find that since the supplies are not for retails sale but for exclusive used by the government institutes therefore, since the goods are not meant for retail sale nor it is sold to retail buyers. The condition of the Revenue is that value under Section 4A of Central Excise Act, 1944 has no legs to stand. This issue, in the appellant's own case has been considered by this Tribunal vide Order No. A/ 11746-11747 /2022 dated 28.11.2022 wherein the following order is passed:- 4. We have carefully considered the rival submission. We find that the issue involved in this case relates to the applicability of assessment under section 4A to supplies of pharmaceuticals made for institutional buyers who are runni....
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....ates as follows:-"14. Carrying into effect the price fixed or revised by the Government, its display and proof thereof: 1. Every manufacturer or importer shall carry into effect the price of a bulk drug or formulation, as the case may be, as fixed by the Government from time to time, within fifteen days from the date of notification in the Official Gazette or receipt of the order of the Government in this behalf by such manufacturer or importer. 2. Every manufacturer, importer or distributor of a formulation intended for sale shall display in indelible print mark, on the label of container of the formulation and the minimum pack thereof offered for retail sale, the retail price of that formulation, notified in the Official Gazette or ordered by the Government in this behalf, with the words 'retail price not to exceed' preceding it, and "local taxes extra" succeeding it, in the case of Scheduled formulations. Provided that in the case of a container consisting of smaller saleable packs, the retail price of such smaller pack shall also be displayed on the label of each smaller pack and such price shall not be more than the pro-rata retail price of the main pack rounded off to....
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....by the Govt. in this regard, with the words retail price not to exceed" similar type of provisions have also been made in the para 15(1) of the said order in respect of non-scheduled formulations the only difference being that the words retail price not to exceed" preceding it. And local taxes extra" succeeding it, in the case of scheduled formulations. Similar type of provisions have also been made in the para no. 15 (1) of the said order in respect of non-scheduled formulations, the only difference being that the words retail price not to exceed" preceding it, and local taxes extra" succeeding it, have been replaced by the words maximum retail price" preceding it and the words inclusive of all taxes" succeeding it. 4.3.4.1 After the detailed analysis of the said para no.s 14(2) and 15(1) of the said DPCO, 1995, the following facts are extracted there-from; 4.3.4.1.1. Who is required to adopt it? : Every manufacturer or importer or distributor of a scheduled or non-scheduled formulation. 4.3.4.1.2. When are the said formulations intended for sale? 4.3.4.1.3 What action is required to be taken? : shall display in indelible print mark; 4.3.4.1.4. On which shall such action be taken?....
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.... consequently the appeals of other appellants are also allowed. The appeal of revenue is dismissed." In view of above, we find that there is no merit in Revenue's allegation that such medicaments which are intended for consumption by the institutional buyers and not intended for retail sale are liable to be assessed under section 4A. Consequently, appeal nos. E/12757/2018 and E/12758/2018 are allowed. 4.1 The Appeal no. E/778/2011 against Zydus Healthcare Ltd. (earlier known as Biochem Pharmaceuticals Industries Ltd.) is dismissed as infructuous as the same was filed against the earlier OIO which was remanded by the Tribunal vide order no. A/10920-10926/2017 dated 09/05/2017. Thus, appeal no. E/778/2011 is dismissed as infructuous. From the above decision read with the decision of M/s. USV Ltd (Supra), this Tribunal has already taken a consistent view that the Medicament Supplies to Government Hospitals and Institutional Buyers shall be valued in terms of Section 4 and not Section 4 (A). Therefore, in our considered view the issue is no longer res integra. Following the aforesaid decisions of this Tribunal, the impugned orders are not sustainable. Hen....