2014 (7) TMI 272 - AT - Central Excise

Valuation of goods - Valuation u/s 4A - MRP based valuation - Held that - There is absolutely no evidence to show that the value adopted by the assessee in this case was not in accordance with the provisions of Section 4. There is absolutely no basis on a prima facie basis to come to the conclusion that it was a notional value. - Following decision of Allianz Bio Sciences Pvt. Ltd. Vs. CCE, Puducherry 2012 (7) TMI 32 - CESTAT, CHENNAI and Cadila Pharmaceuticals Ltd. Vs. CCE, Ahmedabad-II 2008 (9) TMI 98 - CESTAT AHEMDABAD - Decided in favour of assessee.

Summary

Issues involved: Determination of assessable value for physicians samples under Central Excise Valuation Rules, 2000.

Analysis:
1. Assessable Value Determination: The appellants cleared certain products under Section 4A of the Central Excise Act, 1944, while physicians samples were cleared under Section 4(1)(a). The issue arose when it was contended that the assessable value of physicians samples should have been determined under Rule 4 of the Central Excise Valuation Rules, 2000, based on the MRP of the goods. This led to proceedings resulting in duty demand confirmation, interest imposition, and penalty equal to the duty demanded.

2. Legal Arguments: The appellant's counsel relied on precedent decisions, citing cases like Meyer Health Care Pvt. Ltd. and M/s. Hi-Tech Pharmaceuticals Pvt. Ltd., to argue that where physicians samples are sold to the brand name owner with a transaction value available, assessment should be based on the transaction value as per Section 4(1)(a). On the other hand, the AR contended that the appellants had adopted a self-determined notional value for assessment, which was less than 25% of the proportionate MRP value of comparable goods. However, the appellant's counsel argued that the value was based on mutually agreed prices between the manufacturer and the buyer, supported by purchase orders and invoices.

3. Tribunal's Decision: After considering the arguments and precedent decisions, the Tribunal found that the reliance on previous judgments by the appellant's counsel was appropriate. It was observed that there was no basis for the conclusions reached by the original authorities, and the precedent decisions cited by the AR were deemed inapplicable. Consequently, the impugned order was set aside, and the appeals were allowed with any consequential relief to the appellants.

4. Conclusion: The Tribunal's decision favored the appellants, emphasizing the importance of assessing the value of physicians samples based on transaction value rather than a notional value. The judgment highlighted the necessity of following legal provisions and precedent decisions to ensure fair and accurate valuation for excise duty purposes.