2019 (3) TMI 1095 - AT - Central Excise

Method of Valuation - clearance of physician samples - section 4 of Central Excise Act 1944 - scope of SCN - Held that - Admittedly that which is now brought forth in arguments are new facts that were not placed before the lower authorities. On behalf of Revenue it is submitted that Customs Excise and Service Tax Appellate Tribunal (Procedure) Rules 1982 bars the Tribunal from taking up and determining an issue on facts that were not available to the lower authorities. We are in full agreement with the contention of Learned Authorised Representative. The Tribunal does not entertain fresh facts in determining a dispute. There is no gainsaying that the Rules exist for furthering the provisions of the statute in the interests of delivery of justice and that the purpose for which the Tribunal was established is not in vain. The original authority is directed to dispose off the matter after considering the facts - appeal allowed by way of remand.

Summary

Issues: Valuation of physician samples for duty liability

Analysis:
The appeals in this case revolve around the dispute in the valuation of 'physician samples' cleared by a company between 2005 and 2009. The central issue is the differential duty amount ordered to be recovered and the claim for refund already paid. The central excise authorities relied on a circular stating that the value for samples distributed free-of-cost should be determined as per the Central Excise Valuation Rules, requiring duty to be discharged proportionate to the retail selling price. The appellant, however, argued that the samples were supplied on a principal-to-principal basis and should not be subject to valuation as if cleared for themselves.

The primary submission of the appellant was opposed by the authorities, highlighting a substantial question of fact crucial to the proceedings. The appellant admitted that these facts were not presented earlier, assuming that the default provision of valuation under the Central Excise Act would apply. The authorities cited various legal precedents to support their position, while the appellant relied on different judgments to bolster their argument.

The Tribunal emphasized that new facts introduced during the appeal were not permissible, as per the Customs, Excise and Service Tax Appellate Tribunal Rules. The Tribunal underscored the importance of adhering to procedural rules to uphold the intent of tax laws and ensure justice delivery. The judgment emphasized that tax levies must align with the law's authorization and that incorrect decisions based on incomplete facts should be rectified through remand to the lower authority for a comprehensive review.

In conclusion, the Tribunal set aside the impugned order and directed the original authority to reevaluate the matter considering all relevant facts and their impact on the application of the Central Excise Act in determining the value of 'physician samples.' The judgment highlights the significance of procedural compliance and the need for a thorough examination of facts to ensure accurate application of tax laws.