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2011 (6) TMI 532 - AT - Central ExciseDemand on account of physician samples cleared - valuation as per Section 4A of the Central Excise Act, 1944 Held that - in the case of Themis Laboratories Pvt. Ltd. (2011 - TMI - 207729 - CESTAT, MUMBAI - Central Excise) appellant has correctly valued their product i.e. cost of raw material inputs job charges. appeal allowed
Issues:
1. Valuation of physician samples cleared by the appellant under Section 4A of the Central Excise Act, 1944 versus transaction value as per Ujagar Prints case. Analysis: The appellant, a job worker, cleared physician samples to the brand owner on payment of duty based on the assessable value determined by the Ujagar Prints case formula. The Revenue contended that duty should be paid under Section 4A of the Act, i.e., MRP less abatement on a pro-rata basis. The appellant argued that as a manufacturer of P & P medicaments, they followed the Ujagar Prints formula for valuation. They cited the Themis Laboratories case and M/s Softesule Pvt Ltd. case where the Tribunal held that valuation should be based on transaction value under Section 4(1)(a) of the Act when samples are cleared to the brand owner. The Revenue relied on various decisions to support their contention. The Tribunal considered whether the appellant should value the physician samples under Section 4A or based on transaction value as per Ujagar Prints. The Tribunal found that the cited case laws by the Revenue were not applicable as those cases involved manufacturers distributing samples for free. In this case, the appellant cleared samples to the brand owner on a transaction value basis, including raw material costs and job charges, following the Ujagar Prints formula. Referring to the Themis Laboratories case, the Tribunal held that when samples are cleared on a transaction value basis to the brand owner, that value should be considered for assessment. Therefore, the Tribunal concluded that the appellant correctly valued the samples based on raw material inputs and job charges. Consequently, the impugned order was set aside, and the appeal was allowed without addressing the limitation issue.
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