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2012 (9) TMI 640 - AT - Central ExciseValuation of physician samples - under the provisions of Rule 8 of the Rules r.w.s. 4 of the Central Excise Act, 1944 OR prorata value of the sales pack manufactured and cleared - Held that - The issue is now squarely covered against the assessee as per Larger Bench decision in the case of Cadila Laboratories Ltd. (2008 (9) TMI 98 - CESTAT AHEMDABAD) that the appellant is liable to pay the differential duty that arose during the material period - the assesee has to pay the interest on differential amount. As there is no dispute to the fact that the appellant was discharging the duty liability on the physician samples under the provisions of Section 4 of the Central Excise Act, 1944 the issue being of interpretation, the penalty imposed under Section 11AC on the appellant seems to be unwarranted.
Issues involved:
1. Stay petition for waiver of pre-deposit of penalty. 2. Valuation of physician samples for duty liability. 3. Liability to pay interest on duty amount. 4. Imposition of penalty under Section 11AC of the Central Excise Act, 1944. Issue 1: Stay petition for waiver of pre-deposit of penalty The stay petition was filed by the appellant seeking a waiver of pre-deposit of the penalty involved in the case, as they had already discharged the central excise duty liability and interest. The Tribunal found that the appeal itself could be disposed of at that juncture. After allowing the stay petition, the Tribunal proceeded to take up the appeal for disposal. Issue 2: Valuation of physician samples for duty liability The main issue in this case revolved around the valuation of physician samples cleared by the appellant between April 2005 to September 2006. The appellant had valued the samples based on Rule 8 of the Central Excise Rules and Section 4 of the Central Excise Act, 1944. However, the Revenue contended that the samples should have been valued based on the prorata value of the sales pack manufactured and cleared. The Tribunal referred to a Larger Bench decision in the case of Cadila Laboratories Ltd. and held that the appellant was liable to pay the differential duty based on the prorate value. The appellant had already paid the duty liability, and the Tribunal directed them to pay interest on the remaining amount within 30 days. Issue 3: Liability to pay interest on duty amount The Tribunal determined that the appellant was liable to pay interest on the duty amount they had paid. While the appellant had paid interest on amounts paid before the issuance of the show cause notice, they had not paid interest on a specific amount. The Tribunal directed the appellant to pay interest on this outstanding amount within 30 days and provide evidence to the lower authorities. Issue 4: Imposition of penalty under Section 11AC Regarding the imposition of penalty under Section 11AC of the Central Excise Act, 1944, the Tribunal considered the issue of valuation of physician samples. It was noted that there was a dispute between the department and the trade, which had to be decided by a Larger Bench. Given the interpretation issue involved, the Tribunal found that the penalty imposed on the appellant seemed unwarranted. Consequently, the Tribunal set aside the penalty imposed by the lower authorities. In conclusion, the Tribunal set aside the penalty imposed under Section 11AC of the Central Excise Act, 1944 and disposed of the appeal accordingly.
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