1991 (10) TMI 45 - HC - Central Excise

Summary

Issues:
Interpretation of Section 4 of the Central Excises & Salt Act, 1944 in relation to excise duty on medicinal and pharmaceutical preparations containing alcohol.

Detailed Analysis:

1. Background: The respondents manufacture medicinal and pharmaceutical preparations, some containing alcohol, which are assessable to excise duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. The excise duty calculation is based on Section 4 of the Central Excises & Salt Act, 1944.

2. Related Person: All preparations of the respondents are sold through Franco Indian Pharmaceuticals Pvt. Ltd., treated as a related person under Section 4(c) of the Central Act. The price at which Franco Indian sells the preparations to wholesalers is the assessable value for excise duty purposes. A trade discount of 8% given by Franco Indian to wholesalers is factored into the assessable value.

3. Dispute and Demands: An officer demanded a sum as differential duty for preparations cleared as physicians' samples between specific periods. The respondents disputed the demand, leading to subsequent demands and directions for payment by the appellants' officers.

4. Legal Interpretation: Section 4 of the Central Act determines the value for excise duty based on the price at which goods are sold in wholesale trade. If goods are sold only through a related person, as in this case, the price at which the related person sells the goods is the assessable value for excise duty.

5. Court Decision: The court upheld the lower court's decision, emphasizing that the price at which Franco Indian sells the respondents' preparations to wholesalers is the value for levying excise duty. The appeal was dismissed with costs, and no grounds for expediting the order copy were found.

6. Conclusion: The judgment clarified the application of Section 4 of the Central Act in determining excise duty on medicinal and pharmaceutical preparations sold through a related person. It affirmed that the assessable value is based on the price at which the related person sells the goods in wholesale trade, dismissing the appeal and upholding the lower court's decision.