2010 (9) TMI 1126 - AT - Central Excise

Summary

Issues involved: Assessment of assessable value of physician samples distributed free of cost, invocation of longer period for demand, applicability of limitation period.

Assessment of assessable value: The appellants, engaged in manufacturing pharmaceutical products, disputed the assessable value of physician samples distributed free of cost. The advocate for the appellants acknowledged that a previous Tribunal decision had ruled against them on the merits of the issue. However, he contested the demand on the grounds of limitation, citing the delay between the period in question (May 2005 to December 2006) and the issuance of the show cause notice in June 2008. The advocate argued that since the matter was referred to the Larger Bench and there were doubts, the demand should be considered time-barred.

Invocation of longer period for demand: The Tribunal considered a previous judgment involving M/s. Marsha Pharma Pvt. Limited, where it was noted that despite a circular issued by the Board, contradictory views persisted, indicating that the matter was not conclusively settled. The Tribunal ruled that since different interpretations were possible, the extended period could not be invoked, and penalty could not be imposed. The Tribunal allowed the appeal for the demand beyond one year, set aside the penalty, and remanded the matter for recalculating the duty demand within the limitation period under Section 11A of the Central Excise Act, 1944.

Applicability of limitation period: Following the precedent set in the case of M/s. Marsha Pharma Pvt. Limited, the Tribunal in the present case held that the demand was also barred by limitation. Consequently, the impugned order was set aside, and the appeal was allowed. The stay petition and appeal were disposed of accordingly.