2015 (10) TMI 837 - AT - Central Excise

Denial of abatement claim - whether the MRP Price minus abatement should be the basis of valuation of free distribution of physician samples - Held that - There is no clarity in the finding of the Adjudicating Authority, and therefore, it is difficult to decide the case on facts and law. Hence, the Adjudicating Authority is required to examine the case afresh after considering the submission of the appellants and the case laws relied upon by the appellants and to pass order in accordance with law. Needless to say that, the Adjudicating Authority shall give proper opportunity of hearing before passing the order. The appeal filed by the appellant is allowed by way of remand - Decided in favour of assessee.

Summary

Issues: Valuation of physician samples under Central Excise Act, 1944.

In the judgment by the Appellate Tribunal CESTAT Ahmedabad, the issue revolved around the valuation of physician samples under the Central Excise Act, 1944. The appellant, engaged in manufacturing P & P Medicaments, faced Show Cause Notices for the period September 2006 to March 2009, proposing duty demand on samples cleared. The main question was whether the basis of valuation for free distribution of physician samples should be MRP Price minus abatement. The appellant argued that they correctly cleared the samples to brand owners on transaction value under Section 4 of the Act, citing relevant case laws like Sidmak Laboratories (India) Ltd., Geinova Laboratories India Pvt. Ltd., and Themis Laboratories Pvt. Ltd.

The appellant contended that the Adjudicating Authority erred in applying Rule 10A of the Valuation Rules, 2000, as the brand owners did not supply goods to them. Conversely, the Revenue's Authorized Representative argued that the appellant company was controlled by the brand owners as per the agreement. The Tribunal noted the lack of a clear finding on the applicability of Rule 10A and the determination of duty under Section 4A of the Act in the Adjudication order. Due to this lack of clarity, the Tribunal deemed it difficult to decide the case on facts and law.

Ultimately, the Tribunal held that the Adjudicating Authority needed to re-examine the case, considering the appellant's submissions and the relevant case laws. The Authority was directed to pass an order in accordance with the law, providing proper opportunity for a hearing. The appeal was allowed by way of remand, with no expression of opinion on the merits of the case. This decision emphasized the importance of clarity in findings and proper application of law in determining the valuation of physician samples under the Central Excise Act, 1944.