2018 (2) TMI 635 - AT - Central Excise

Valuation - physician samples to be supplied to its principal - whether it should be covered under Section 4(1)(b) of the Central Excise Act, 1944 or under Section 4A of the Central Excise Act, 1944? - Held that - the appellant is manufacturing some medicines on his own, and the remaining about 40 medicines are obtained on the basis of job-work. No separate assessment pertaining to the valuation of the physician sample has been made out by the lower authority as per the ratio laid down by the Tribunal in the case of ZYG Pharma Pvt. Ltd. v. Commissioner of Central Excise, Indore 2016 (12) TMI 524 - CESTAT NEW DELHI . Matter remanded to the original authority to make out the valuation of the physician samples of the medicines manufactured by the appellant separately and the samples manufactured by the job-worker but by providing reasonable opportunity of hearing to the appellant - appeal allowed by way of remand.

Summary

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

Analysis:
The appeal was filed against Order-in-Appeal No: YG/5/Th-II/08 dated 08/10/2008. The appellant, engaged in manufacturing medicines on a job-work basis, had a dispute regarding the valuation of physician samples under Section 4(1)(b) or Section 4A of the Central Excise Act, 1944. The Tribunal noted that different valuation is required when the assessee manufactures goods on its own and obtains goods on job-work basis. In this case, the appellant manufactured some medicines independently and obtained about 40 medicines on a job-work basis. The lower authority failed to make a separate assessment of the physician sample's valuation, as per the precedent set by the Tribunal in a previous case. Thus, the Tribunal set aside the impugned order and remanded the matter to the original authority. The original authority was directed to determine the valuation of physician samples separately, considering those manufactured by the appellant and those manufactured by the job-worker. The appellant was to be given a reasonable opportunity of hearing, and fresh evidence could be admitted if necessary. Consequently, the appeal was allowed by way of remand.