2019 (4) TMI 122 - AT - Central Excise

Valuation - physician samples - case of the department is that in both type of clearances, the duty should have been paid on the value which is pro-rata value of trade pack of the same medicament - time limitation - Held that - Similar issue decided in the case of COMMISSIONER - CENTRAL EXCISE & CUSTOMS VADODARA - I VERSUS MARSHA PHARMA PVT LTD 2010 (9) TMI 1125 - GUJARAT HIGH COURT where it was held that when different interpretations were possible, the extended period of limitation could not be invoked and penalty could not be levied. Thus, it cannot be said that appellant has suppressed any fact or had any malafide intention. Accordingly, the demand for the period April 2005 to December 2006 by issuing a show cause notice dated 11.03.2008, is time-barred - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether duty should be paid on the pro-rata value of trade pack of medicaments in both types of clearances.
2. Whether the demand for the period April 2005 to December 2006 is time-barred due to conflicting interpretations of circulars.

Analysis:
1. The appellant, engaged in manufacturing medicaments and clearing physician samples, paid excise duty based on the cost construction method. The department contended that duty should have been paid on the pro-rata value of the trade pack. The appellant argued that due to doubts and contrary decisions, there was no suppression of facts, and the demand is time-barred. They cited relevant judgments to support their case.

2. The Revenue reiterated the findings of the impugned order. The Tribunal, after considering submissions and records, focused on the limitation aspect without delving into the merits. Referring to a similar case decided by the Hon'ble Gujarat High Court, it was observed that conflicting views on circulars indicated that the matter was not settled despite the circulars. Therefore, the demand for the period in question was held as time-barred, as the appellant did not suppress any facts or have malicious intent. Consequently, the impugned order was set aside, and the appeal was allowed.

This judgment highlights the importance of clarity in legal interpretations, the significance of circulars, and the impact of conflicting views on the limitation period for demands.