2018 (5) TMI 1190 - AT - Central Excise

Valuation - P&P Ayurvedic medicines - Revenue was of the view that such Proprietory medicines sold with brand names by the manufacturers were liable to payment of Excise duty on MRP basis under Section 4A of the Central Excise Act read with N/N. 49/2008-CE (NT) dt. 24.12.2008 (as amended) - Held that - The original entry (w.e.f. 24.12.2008) (Sl. No. 30) has brought only medicaments other than Ayurvedic etc. medicines within the purview of MRP assessment. The amendment carried out w.e.f. 24.03.2011 further brings only the classical Ayurvedic medicines within the clutches of MRP assessment. This amendment is silent about the P&P Ayurvedic medicines sold with the brand name and there will be no justification to include such medicines for assessment under Section 4A w.e.f. 24.03.2011. Finally w.e.f. 01.03.2013 Ayurvedic medicines not only classical medicines but also P&P medicines with the brand name have been included in the Notification for charge of duty under Section 4A. With effect from 01.03.2013 there is no dispute since duty is being paid under Section 4A. In the absence of specific entry in the Notification there is no justification prior to 01.03.2013 in charging Excise duty on the basis of Section 4A for P&P Ayurvedic medicines. Hence all demands prior to 01.03.2013 are set aside. Appeal disposed off.

Summary

Issues:
Interpretation of Notification No. 49/2008-CE (NT) for Ayurvedic medicines under Section 4A of Central Excise Act before 01.03.2013.

Analysis:
The Appellate Tribunal CESTAT NEW DELHI considered cross-appeals filed by the appellant and the Department against orders by the Adjudicating Authority. The issue in all appeals was identical, related to the classification of proprietary Ayurvedic medicines for Excise duty payment. The dispute concerned whether such medicines sold with brand names were liable for Excise duty on MRP basis under Section 4A of the Central Excise Act. The Tribunal heard arguments from both parties and noted that the dispute only pertained to Patent and Proprietary (P&P) Ayurvedic medicines, not classical Ayurvedic medicines.

The Tribunal analyzed Notification No. 49/2008-CE (NT) and its subsequent amendments, particularly focusing on the amendments made in 2011 and 2013. The Notification specified goods subject to assessment on the basis of MRP under Section 4A. The Tribunal observed that prior to 01.03.2013, there was ambiguity regarding the applicability of MRP assessment for P&P Ayurvedic medicines. The Revenue argued for MRP assessment for all Ayurvedic medicaments even before 01.03.2013, while the assessee contended that before this date, P&P Ayurvedic medicines were not covered under Section 4A.

The Tribunal carefully examined the amendments in the Notification and concluded that the original entry and the 2011 amendment only brought classical Ayurvedic medicines under MRP assessment. The Tribunal found no justification to include P&P Ayurvedic medicines for assessment under Section 4A from 24.03.2011. However, from 01.03.2013, all Ayurvedic medicines, including P&P medicines with brand names, were included for duty under Section 4A. Therefore, the Tribunal set aside all demands for Excise duty before 01.03.2013 due to the absence of a specific entry in the Notification regarding P&P Ayurvedic medicines.

The Tribunal disposed of all appeals based on the above findings, directing the Adjudicating Authority to re-decide minor issues in some appeals after providing a fair hearing to the parties. The judgment clarified the interpretation of Notification No. 49/2008-CE (NT) concerning the assessment of Ayurvedic medicines under Section 4A of the Central Excise Act before 01.03.2013, resolving the dispute between the appellant and the Revenue.