2002 (10) TMI 656 - AT - Central Excise

Summary

Issues: Duty demand on physician's samples, valuation method under Rule 6(b)(i) of Valuation Rules, time-barred demand, waiver of duty, penalties imposed.

Duty Demand on Physician's Samples:
The judgment pertains to the confirmation of duty demand amounting to Rs. 45,56,833 on physician's samples of P & P medicines falling under Chapter Heading 30.03 of the Central Excise Tariff Act, 1985. The manufacturer, M/s. Medley Pharmaceuticals Ltd., was penalized an amount equal to the duty demand. Additionally, penalties of Rs. 10 lakhs and Rs. 5 lakhs were imposed on the Director and Administrative Officer of the company under Rule 209A.

Valuation Method under Rule 6(b)(i) of Valuation Rules:
The demand arose due to the application of Rule 6(b)(i) of the Valuation Rules for the valuation of physician's samples. The applicants argued that they followed Rule 6(b)(ii) based on the Commissioner (Appeals) order in 1998. They contended that conflicting orders on valuation existed, and the demand up to July 1999 was time-barred as they filed declarations with valuation details supported by a Chartered Accountant's certificate.

Time-Barred Demand and Waiver of Duty:
The Tribunal considered the arguments presented by both sides. It held that the demand up to July 1999 was prima facie time-barred, as the applicants consistently provided valuation details certified by a Chartered Accountant. However, for the period July 1999 to May 2000, the Tribunal found no prima facie case for waiver, as the applicants failed to demonstrate the applicability of Rule 6(b)(ii) despite availability of comparable goods' particulars. A pre-deposit of Rs. 15 lakhs was directed towards the duty demand within the normal limitation period, with the balance amount and penalties waived upon compliance within eight weeks.

Penalties Imposed:
Apart from the duty demand, penalties were imposed on the Director and Administrative Officer of the company under Rule 209A. The judgment did not provide specific details regarding the reasons for the penalties or any challenges raised by the penalized individuals.

Conclusion:
The judgment by the Appellate Tribunal CESTAT, Mumbai addressed the duty demand on physician's samples, the application of Valuation Rules, time-barred demands, and the imposition of penalties. It highlighted the importance of following the correct valuation method and complying with statutory requirements to avoid penalties and ensure timely payment of duties.