9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (9) TMI 1278 - AT - Central ExciseValuation of physician samples - replica of dutiable goods are removed from factory for free distribution to medical practitioners with the cost thereof implicitly included in the valuation of the goods or not - HELD THAT - The findings are not tenable for its lack of clarity on the transactions that were sought to be brought within the tax net. It also cannot be seen how goods cleared to principal manufacturer from raw materials supplied by them can take recourse to rule 4 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000, as held by the first appellate authority, when rule 8 is specific to such a situation. It would also appear to us that rule 4 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000 is applicable when, as held in CADILA PHARMACEUTICALS LTD. VERSUS COMMR. OF C. EX., AHMEDABAD-II 2008 (9) TMI 98 - CESTAT AHEMDABAD , no sale occurs at the time of removal warranting recourse to price at which goods are sold at the nearest time of removal. The facts and circumstances of each removal and the nature of the transaction with the recipient of such clearances will determine the specific provision in Central Excise (Determination of Price of Excisable Goods) Rules, 2000 that must be applied. It would be in the fitness of things for such detailed scrutiny to be undertaken by the original authority. The impugned order is modified and the terms of remand to the original authority altered accordingly.
Issues Involved:
1. Valuation of 'physician samples' in the pharmaceutical industry. 2. Applicability of Rule 4 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. 3. Imposition of penalty under Rule 25 of Central Excise Rules, 2002. Summary: Issue 1: Valuation of 'physician samples' in the pharmaceutical industry The dispute revolves around the valuation of 'physician samples' by M/s Maneesh Pharmaceuticals Ltd. The company challenged the order of the Commissioner of Central Excise & Service Tax (Appeals), Mumbai Zone-I, which proposed recovery of Rs. 7,64,414 along with applicable interest and penalty. The core issue is whether the valuation should be based on the pro-rata MRP price of the final pack of the medicine as per Rule 4 of the Central Excise Valuation Rules, 2000, or on the transaction value under Section 4 of the Central Excise Act, 1944, for samples sold outright. Issue 2: Applicability of Rule 4 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 The Tribunal referred to various judicial decisions and departmental clarifications, including CBEC Circulars and judgments from the Hon'ble Supreme Court and High Courts. It was held that for physician samples supplied free of cost, Rule 4 should be applied, valuing them at the pro-rata MRP price. Conversely, for samples sold outright, the transaction value should be considered under Section 4 of the Central Excise Act, 1944. The Tribunal emphasized that the facts and circumstances of each clearance must determine the applicability of the appropriate rule. Issue 3: Imposition of penalty under Rule 25 of Central Excise Rules, 2002 The Tribunal found that the issue involved the correct interpretation of the statute and Valuation Rules, with divergent views expressed by various judicial forums. Therefore, it was not considered a fit case for imposing any penalty on the appellants under Rule 25 of the Central Excise Rules, 2002. Conclusion: The Tribunal modified the impugned order and remanded the matter to the original authority for detailed scrutiny of each removal and transaction to determine the specific provision in the Central Excise Valuation Rules, 2000, that must be applied. The finding on the applicability of the penalty was not an issue before the original authority. The order was pronounced in the open court on 26/09/2023.
|
