2010 (9) TMI 243 - AT - Central Excise

Penalty and duty - samples cleared by assessee - by adopting the assessable value as 110% of the cost - Revenue contention is that samples have to be valued on the basis of pro-rata cost - Assessee dispense with the condition of pre-deposit of duty and penalty - Held that - Commissioner (Appeals) has not decided the appeals on merits, we set aside the impugned order and remand the matters to him for fresh decision

Summary

Issues:
1. Dismissal of appeal for non-compliance with stay order
2. Valuation of physicians samples
3. Application of longer period of limitation

Analysis:

1. The judgment addresses the issue of the dismissal of the appeal due to non-compliance with the stay order. The Commissioner (Appeals) had directed the appellant to deposit specific amounts towards penalty and other charges. The Tribunal found that the demand was confirmed against the appellant concerning physicians samples cleared during a specific period. Despite a Larger Bench judgment against the appellant, the Tribunal noted the existence of contra decisions during the relevant period. Citing cases like Marsha Pharma Pvt. Ltd. and Parnax Lab. Pvt. Ltd., the Tribunal observed that the longer period of limitation cannot be invoked based on suppression or malafide intent. Consequently, the Tribunal found prima facie merits in the appellant's favor and dispensed with the pre-deposit condition of duty and penalty.

2. The issue of valuation of physicians samples was also crucial in this judgment. The demand against the appellant was based on valuing physicians samples at 110% of their cost, while the Revenue argued for valuation based on the pro-rata cost of regular bags of medicines. Despite the Larger Bench judgment ruling against the appellant, the Tribunal considered the existence of contradictory decisions during the relevant period. The Tribunal highlighted that the longer period of limitation cannot be invoked by assuming suppression or malafide intent, as seen in previous cases. Consequently, the Tribunal set aside the impugned order and remanded the matters to the Commissioner (Appeals) for a fresh decision in line with the Tribunal's declared law, without requiring any pre-deposits.

3. Lastly, the judgment discussed the application of the longer period of limitation. Despite the demand being confirmed against the appellant, the Tribunal noted the existence of contra decisions during the relevant period, emphasizing that the longer period of limitation cannot be invoked based on suppression or malafide intent. The Tribunal referred to previous cases to support this observation. As a result, the Tribunal found merit in the appellant's case and waived the pre-deposit condition, setting aside the impugned order and remanding the matters for a fresh decision without insisting on any pre-deposits. The stay petition and appeal were disposed of accordingly.