2009 (1) TMI 584 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit and stay of recovery in respect of duty and penalty amounts under Central Excise Act, 1944.

Analysis:

1. Valuation of Goods for Payment of Duty:
The appellant was selling pharmaceutical products to large-scale manufacturing units, paying duty under Section 4(1)(a) of the Central Excise Act, 1944. The lower authorities contended that since the goods were to be distributed as physician samples, they should be valued for duty payment under Rule 4 of the Valuation Rules read with Section 4(l)(b) of the Act. The authorities relied on a Board's circular and a judgment of the Bombay High Court. The appellant argued that the circular and the High Court's judgment were factually distinguishable. They cited a Tribunal's decision in a similar case where waiver and stay were granted.

2. Grant of Waiver and Stay:
After hearing both parties, the Tribunal found that the goods in question were actually sold by the appellant to other manufacturing units under the latter's brand name. This principal-to-principal sale arrangement did not align with the Board's circular or the High Court's judgment related to goods supplied free as physician samples. Therefore, the Tribunal was inclined to grant waiver and stay of recovery for the duty and penalty amounts in the present case, following the precedent cited by the appellant's counsel.

In conclusion, the Tribunal granted the application for waiver of pre-deposit and stay of recovery in respect of duty and penalty amounts based on the unique circumstances of the case where the goods were sold on a principal-to-principal basis, differentiating it from cases involving physician samples. The decision was influenced by the absence of applicability of the Board's circular and the High Court's judgment to the specific facts of the present case, leading to a favorable outcome for the appellant.