9911796707
TMI Blog1998 (8) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 245/83, dated 13-9-1983, whereas the Department is arriving at the assessable value of the medicines in question, in terms of the said Notification No. 245/83, the appellants are not claiming the benefit of the said notification and their contention is to adopt the assessable value at which they are selling the medicines in the wholesale trade to their independent buyers at the place and time of removal under the provisions of Section 4(1)(a) of the Central Excises and Salt Act, 1944. 1.2 For the sake of convenience, the said Notification No. 245/83 is reproduced below : "Exemption to Patent or Proprietary Medicines. - In exercise of the powers conferred by sub-rule (1) of the Central Excise Rules, 1944, and in supersession of the notification of the Govt. of India in the Ministry of Finance (Department of Revenue and Insurance) No. 161/66-Central Excises, dated the 8th October, 1966, the Central Government hereby exempts patent or proprietary medicines falling under heading No. 30.03 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from so much of the duty of excise leviable thereon under the Central Excises and Salt Act, 1944 (1 of 1944) as is in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee under the said notification is also one of the conditions and if the manufacturer does not claim the exemption, the same cannot be extended by the Department. In support of his above submission that whether it is the option of the assessee to avail the benefit of the notification or not, he placed reliance upon a number of decisions. 3. Taking the second point, he submitted that it is a well-settled principle that exemption rate cannot exceed the Tariff rate. Though the Notification No. 245/83 is an exemption notification, but the same, in essence, has resulted in more duty-liability to the appellants than what they would have paid by adopting the assessable value under Section 4(1)(a). Learned Advocate also argued that they have satisfied all the conditions of Section 4(1)(a) and the wholesale price declared by them under said section has not been challenged by the Department as being not genuine. Once the Department accepts the wholesale price, the same has to be picked up as an assessable valued irrespective of the existence of the notification. They also clarified that they have not sold the goods at a retail price, though the retail price has been shown i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above proviso, "landed cost" shall mean the cost of import of drug inclusive of Customs duty and clearing charges." 4.1 From the said formulation, it is apparent, submitted the learned SDR, that in fixing the retail prices the Government has taken a fixed excise duty element apart from cost etc. It is that excise duty element which should be payable to the Department as excise duty. Assessee must show, according to him, that the excise duty element which is included in the maximum retail prices fixed is being paid to the Department. If that is not so, then there is a breach of the provisions of the DPCO and they cannot be allowed to take the benefit of their own wholesale prices at which they are selling the goods. 5. We have considered the submissions of both sides. We find that in the normal course, the appellants are required to pay the duty on the assessable values calculated in terms of Section 4. The basis for such calculation is the price at which the goods are ordinarily sold in the wholesale market for delivery at the time and place of removal, if the buyer is not a related person and the price is the sole consideration for sale. The notification in question do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose price has been fixed under the Drugs (Price Control) Order, 1987 (as amended); Hence action was required to be taken in terms of the proviso (ii) of Section 4(1)(a). This proviso reads as follows : "(ii) where such goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force or at a price, being the maximum, fixed under any such law, then, notwithstanding anything contained in clause (iii) of this proviso, the price or the maximum price, as the case may be, so fixed, shall, in relation to the goods so sold, be deemed to be the normal price thereof." 7. In other words, the basic dispute is regarding the determination of correct assessable value and in this respect, it is required to be seen whether Section 4(1)(a) proper would apply or proviso (ii) thereof would apply in show cause notice as well as the impugned order, however, in addition refer to Notification No. 245/83, dated 13-9-1983 (as amended). We have gone through this notification and it is observed that it is an exemption notification issued under sub-rule (1) of Rule 8 of the Central Excise Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because proviso (ii) of Section 4(1)(a) relates to wholesale trade and not retail trade and does not refer to retail price but a price or maximum price fixed for the purpose of wholesale trade. 11. It is significant that this sub-clause (ii) has been given priority over the clause (iii) and not over the main clause (a) of Section 4(1) and comes into picture only where a price or a maximum price is fixed under any law in respect of sale during the course of wholesale trade. The Department has not been able to show any such price in respect of the goods in question. In the above circumstances, the price normally charged by the appellants during the course of wholesale trade was required to be taken into consideration for the purpose of determining the assessable value in terms of Section 4(1)(a). Once the assessable value has been so determined it is tariff rate which could come into picture if the assessee does not want to avail of the benefit of the exemption notification since an assessee cannot be compelled to opt for an exemption notification. (This is, however, without prejudice to any other notification to which the appellants may otherwise be entitled). Even otherwise, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
