2001 (6) TMI 770 - AT - Central Excise

Summary

Issues:
1. Determination of the value of pharmaceutical products under the Drug (Prices Control) Order 1987.
2. Interpretation of Clause (ii) of the proviso under Clause (a) of sub-section (1) of Section 4 of the Act.
3. Application of discount permissible under Notification 245/83 on the retail price of goods.
4. Conditions for claiming exemption under Notification 245/83.
5. Entitlement to deductions on account of discount while determining assessable value.

Analysis:
1. The appeal before the Appellate Tribunal CEGAT, Mumbai involved the determination of the value of four pharmaceutical products manufactured by the appellant, based on the revision of maximum retail prices by the Government of India under the Drug (Prices Control) Order 1987. The appellant submitted a price declaration, and the issue at hand was to ascertain the assessable value of these goods.

2. The Assistant Commissioner, whose decision was upheld in appeal, applied Clause (ii) of the proviso under Clause (a) of sub-section (1) of Section 4 of the Act to determine the assessable value. However, the Tribunal disagreed with this approach, noting that the proviso applies only when goods are sold at a price fixed by law or at the maximum price fixed under any such law. Since the appellant was selling the goods at a price lower than the maximum retail price, the proviso did not apply in this case.

3. The Tribunal also addressed the application of discounts on the retail price of the goods under Notification 245/83. It was emphasized that the exemption under the notification is subject to specific conditions, including the fulfillment of three criteria by the manufacturer. The Tribunal clarified that unless these conditions are met, the manufacturer cannot claim the exemption, and it cannot be imposed on them.

4. Considering the above factors, the Tribunal concluded that the assessable value of the goods should be determined in accordance with the provisions of Section 4(1)(a) of the Act, allowing for deductions on account of discount if permissible under the law. As a result, the matter was remanded to the Assistant Commissioner for further consideration.

5. Consequently, the appeal was allowed, and the impugned order was set aside. The Assistant Commissioner was directed to review the price declaration in light of the Tribunal's decision, providing the appellant with an opportunity to make representations and ensuring compliance with the law during the assessment of the assessable value of the pharmaceutical products.