2018 (1) TMI 1255 - AT - Central Excise

Valuation - Physician samples made for free distribution - SSI Exemption - Held that - the physician samples cleared during the exemption limit period would not attract any duty at all and it was not fair on the part of the Revenue to calculate the duty on all the clearances of physician samples - matter remanded to the original adjudicating authority for recalculation of the duties - matter remanded for re-quantification.

Summary

Issues:
1. Assessment of duty on physician samples under the SSI exemption.
2. Duty calculation for physician samples under the brand name of other manufacturers.
3. Exceeding SSI exemption limit and duty payment on physician samples.
4. Dispute over duty calculation for physician samples cleared without payment.
5. Appeal by the Revenue regarding quantification of duty.

Analysis:
1. The appellant, engaged in pharmaceutical manufacturing, availed SSI exemption for physician samples under Notification No.8/2003-CE. The Revenue contended duty assessment on pro-rata basis for all physician samples, citing a Tribunal decision. Appellant argued duty should be paid only on transaction value as per Section 4 A of the Central Excise Act, supported by a relevant case law.

2. Appellant exceeded SSI exemption limit in some years, leading to duty calculation on pre-rata basis for physician samples. Appellant disagreed, stating duty should be based on transaction value. The Tribunal agreed with the appellant, setting aside demands for samples cleared on transaction value under other manufacturers' brand names.

3. Regarding physician samples cleared without duty for free distribution, the Revenue calculated duty on all samples, even during the exemption period. The Tribunal ruled that duty should not apply to samples cleared during the exemption period. However, samples cleared after crossing the exemption limit would attract duty on a pro-rata basis.

4. The Tribunal remanded the matter to the original authority for recalculation of duties, allowing the appellant's appeal by setting aside demands for samples cleared on transaction value. The Revenue's appeal, focused on duty quantification, was addressed as the matter was remanded for re-quantification, resolving the Revenue's grievance effectively.