2010 (6) TMI 741 - AT - Central Excise

Summary

Issues involved: Dispute regarding valuation of physician's samples of medicaments distributed free of cost, retrospective effect of circulars on assessment.

Valuation dispute: The dispute in the case revolved around the valuation of physician's samples of medicaments distributed free of cost by the appellant. The Commissioner (Appeals) upheld the duty and penalty imposed by the original adjudicating authority based on a circular dated 25-4-2005, which required determination of physician's samples in terms of Rule 6 of Central Excise Valuation Rules, 2000. However, the appellant argued that the period involved in the appeal was prior to the issuance of the subsequent circular on 25-4-2005, and therefore, the assessment should be made in accordance with the earlier circular dated 1-7-2002, which was governing the field during that period.

Legal references: The appellant relied on various Tribunal judgments and a Supreme Court judgment to support their contention. They cited cases such as CCE, Daman v. Wockhardt Ltd., CCE, Daman v. Indchemie Health Specialties Pvt. Ltd., M/s Meridian Enterprises Pvt. Ltd. v. CCE, Daman, and M/s Bezel Pharma Pvt. Ltd. v. CCE, Mumbai-V. Additionally, reference was made to the Supreme Court's judgment in the case of M/s Suchitra Components Ltd. v. CCE, Guntur, which established that beneficial circulars are to be applied retrospectively while oppressive circulars are applicable prospectively.

Judgment: The Tribunal, considering the precedents cited, concluded that for the period prior to 2005, the assessable value of physician's samples should be determined in accordance with the Board's circular dated 1-7-2002, which allowed the adoption of value at 115% cost of production. Therefore, in the appeals filed by the assessee where the entire period was covered by the 2002 circular, the duty confirmation and penalty imposed were set aside, and both appeals were allowed. On the other hand, the appeal filed by the Revenue was rejected as the appellate authority had ruled in favor of the Revenue, providing no grounds for grievance.

Conclusion: The Tribunal's decision highlighted the importance of applying relevant circulars retrospectively and emphasized the significance of legal precedents in determining valuation disputes related to excise duty.