1997 (1) TMI 311 - AT - Central Excise

Summary

Issues:
- Confirmation of demands of duties on P & P medicines manufactured by the appellant during specific periods.
- Interpretation of Notifications No. 161/66 and No. 245/83 regarding duty exemption calculations.
- Discrepancy in trade discounts granted by the appellant and its impact on assessable value.
- Compliance with the statutory retail price requirements under the notification.

Analysis:
The judgment by the Appellate Tribunal CEGAT, New Delhi pertains to appeals against original orders confirming demands of duties on medicines manufactured by the appellant during specific periods. The appellant initially availed the benefit of Notification No. 161/66 till it was replaced by Notification No. 245/83, which provided exemptions on duties calculated based on the assessable value under the Central Excise Act, 1944. The exemption was granted on the excess duty beyond the limit calculated after deducting 15% from the retail price of the medicines specified in the price lists. The appellant filed price lists indicating the statutory retail price, basic duty, special duty deductions, and the 15% discount for approval.

The issue arose when show cause notices alleged that the appellant did not grant a 15% trade discount to all buyers, resulting in a higher assessable value and lower duty payment. The Additional Collector confirmed the demands based on this discrepancy. However, the Tribunal clarified that the focus should be on determining the duty payable under the notification, not the assessable value under Section 4 of the Act. The appellant correctly calculated duty based on the statutory retail price after deducting the duty element and the statutory 15% discount, which was in line with the notification requirements.

The Tribunal rejected the argument that the statutory price and the actual selling price should be equal, emphasizing that the statutory price list should represent the retail price at which the medicines are ordinarily sold, not the wholesale price. As the department failed to prove any violation of the statutory price requirements, the Tribunal concluded that the appellant had paid the correct amount of duty under the notification. Consequently, the impugned orders confirming the demands were set aside, and the appeals were allowed, while the cross-objection was dismissed as supportive.