2024 (7) TMI 302 - AT - Central Excise

Valuation - physician samples (P or P Medicaments) clearing to the distributor - to be assessed under Section 4 (1) (a) or 4 (1) (b) of Central Excise Act 1944 - period from July 2010 to December 2010 - HELD THAT - The issue stands covered as per the decision of the Tribunal in the appellant s own case M/S. FOURRTS (INDIA) LABORATORIES P. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2023 (9) TMI 56 - CESTAT CHENNAI where it was held that ' the case would be covered by the provisions of Section 4(1)(a) of the Act and in view thereof Rule 6(b)(ii) of the Rules would not apply.' The demand cannot sustain. The impugned orders are set aside. The appeals are allowed.

Summary

Issues:
Assessment of physician samples under Section 4 (1) (a) or 4 (1) (b) of Central Excise Act 1944.

Analysis:
The case involved the assessment of physician samples (P or P Medicaments) cleared to the distributor under Section 4 (1) (a) or 4 (1) (b) of the Central Excise Act 1944. The appellant had adopted different valuation methods for regular clearances and physician samples. The department contended that physician samples should also be assessed under Section 4A of the Act. The Tribunal referred to a previous decision in the appellant's own case and relevant provisions of Section 4 of the Act. The Tribunal analyzed the provisions of Section 4, emphasizing the importance of transaction value for determining excise duty. It was noted that the price was charged by the assessee from the distributors for physician samples, and the case fell under Section 4 (1) (a) of the Act. The Tribunal held that the provisions of Section 4A did not apply in this case, dismissing the appeals of the Revenue based on the previous order.

The Tribunal referred to previous decisions and highlighted that the transaction value is crucial for determining excise duty under Section 4 of the Act. The Tribunal emphasized that the price charged by the assessee to the distributors for physician samples was the relevant consideration, irrespective of whether the samples were given free of cost to physicians. The Tribunal found the department's contention, based on the samples being given free of cost, to be fallacious. The Tribunal held that the case fell under Section 4 (1) (a) of the Act, and Rule 6(b)(ii) did not apply. Consequently, the Tribunal set aside the impugned orders and allowed the appeals with consequential reliefs.

In conclusion, the Tribunal decided that physician samples cleared to the distributor are to be assessed under Section 4 (1) (a) of the Central Excise Act 1944. The Tribunal emphasized the importance of transaction value for determining excise duty and held that the price charged by the assessee to the distributors was the key factor in assessing the samples. The Tribunal dismissed the Revenue's appeals based on the previous order and provided consequential reliefs to the appellant.