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2020 (6) TMI 184 - AT - Central ExciseValuation - Physician Samples - to be valued under Section 4A of Central Excise Act, 1944 or not? - HELD THAT - The issue is squarely settled by the Hon ble Apex Court in COMMR. OF CENTRAL EXCISE CUSTOMS, SURAT VERSUS M/S SUN PHARMACEUTICALS INDS. LTD. ORS. 2015 (12) TMI 670 - SUPREME COURT where it was held that where an assessee clearing physician samples charged a price from the distributors, the duty is payable on such price in terms of Section 4(1)(a) of the Act. Moreover, the moot point in the case is that the appellants are selling the goods to the principal manufacturers. Therefore, the sales are to industrial consumers and are not sold / supplied to retail consumers. By this logic also, the provisions of Section 4A are not applicable in the facts of the case. Thus, the physician samples cleared by M/s. Ontop Pharmaceuticals are to be valued under Section 4 of Central Excise Act, 1944 - appeal dismissed - decided against Revenue.
Issues involved: Valuation of Physician samples under Section 4A of Central Excise Act, 1944.
Analysis: 1. Valuation of Physician Samples: The main issue in this case revolved around the valuation of Physician samples manufactured and sold by Ontop Pharmaceuticals to its brand owner. The Revenue argued that the Physician samples should be valued under Section 4A of the Central Excise Act, 1944. However, M/s. Ontop Pharmaceuticals contended that the duty had been correctly paid on the 'transaction value' as per their agreements with the brand owner, and not under Section 4A. They emphasized that they did not clear physician samples free of cost, as it was their brand owner who distributed the samples among physicians without charge. 2. Legal Precedents and Interpretation: The counsel for M/s. Ontop Pharmaceuticals cited several judgments supporting the position that when physician samples are sold with a price being the sole consideration, duty is payable on that price and not under Section 4A of the Act. They referred to a judgment by the Hon'ble Supreme Court in the case of M/s. Sun Pharmaceuticals Ltd. and highlighted that where an assessee clearing physician samples charged a price from distributors, duty is payable on such price as per Section 4(1)(a) of the Act. The counsel also relied on previous Tribunal orders, including those in the case of M/s. Geltec Pvt Ltd, to support their argument that the issue was settled in favor of their position. 3. Judicial Analysis and Decision: After considering the arguments and case laws presented by both sides, the Tribunal found that the issue was no longer res integra and had been settled by the Hon'ble Apex Court. The Tribunal noted that the appellants were selling goods to principal manufacturers, not retail consumers, making the provisions of Section 4A inapplicable. Consequently, the Tribunal ruled that the physician samples cleared by M/s. Ontop Pharmaceuticals should be valued under Section 4 of the Central Excise Act, 1944. As a result, the appeal filed by the Revenue was dismissed, and the appeal filed by M/s. Ontop Pharmaceuticals was allowed with consequential relief, if any, as per the law. In conclusion, the judgment clarified the valuation method for physician samples, emphasizing the importance of the transaction value and the applicability of Section 4 of the Central Excise Act, 1944 in such cases. The decision was based on legal precedents and a thorough analysis of the facts presented by both parties, ultimately providing clarity on the issue at hand.
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