2018 (12) TMI 7 - AT - Central Excise

Valuation - P or P medicaments - period 21.05.2004 to 08.01.2005 - Held that - The valuation of P or P medicaments manufactured by loan licensee/ job worker is now settled by the Apex Court in the case of Cosme Farma Laboratories Ltd 2015 (4) TMI 355 - SUPREME COURT , where it was held that Once it has been determined that the job workers are the manufacturers, the assessable value of the goods would be a sum total of cost of raw material, labour charges and profit of the job workers, as per circular No.619/10/2002-CX dated 19th February, 2002. The matter remanded back to the adjudicating authority to reconsider the issue afresh after following principles of natural justice.

Summary

Issues: Valuation of P or P medicaments for Central Excise duty calculation during a specific period.

The judgment pertains to an appeal against an Order-in-Appeal dated 31.03.2008 concerning the valuation of P or P medicaments for Central Excise duty calculation between 21.05.2004 to 08.01.2005. The appellant, a loan licensee of a company manufacturing the medicaments, faced challenges from the revenue regarding the valuation method used for duty discharge. The revenue contested the appellant's deduction of discounts offered by the manufacturer, arguing that evidence of passing on discounts to customers was lacking. The adjudicating authority upheld the demands, interest, and penalties imposed. The first appellate authority supported the decision but outlined the correct method for calculating Central Excise duty based on raw material value, job work, manufacturing profit, and expenses. The appellant cited a Supreme Court judgment in CCE vs. Cosme Farma Laboratories Ltd, claiming excess duty payment based on the Apex Court's decision. The departmental representative echoed the first appellate authority's findings. The Tribunal noted the settled valuation principles for medicaments manufactured by a loan licensee/job worker as per the Apex Court's ruling in Cosme Farma Laboratories Ltd, emphasizing the assessable value components. The Tribunal directed a reconsideration by the adjudicating authority in line with the Apex Court's decision, allowing the appellant to submit a Cost Accountant's certificate for consideration. The appeal was disposed of accordingly, emphasizing adherence to legal principles and natural justice in the reassessment process.