9911796707
TMI Blog2016 (2) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Except Rule 8 all other Rules cover the situation where a sale is involved. Hence, it was clarified that residuary Rule 11 will have to be adopted alongwith the spirit of Rule 8 and assessable value would be 115% of cost of manufacture of the said goods. We find in a similar situation that the Hon'ble Supreme Court in the case of Biochem Pharmaceuticals Ind. Ltd. vs. CCE, Vapi reported in (2015 (9) TMI 312 - SUPREME COURT) held that best judgment method in terms of Rule 7 of Erstwhile Central Excise (Valuation) Rules, 1975 is the correct method. The Tribunal in the case of Alkem Laboratories Ltd. vs. CCE, Daman reported in (2006 (7) TMI 30 - CESTAT, MUMBAI ) held that physician sample distributed free of cost are to be valued under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction are taken together for disposal. 2. The respondent are engaged in the manufacture of bulk drug and P&P Medicine liable to Central Excise Duty. They were clearing physician samples meant for free distribution as part of marketing strategy. A dispute arose regarding assessable value to be adopted for these physician samples for discharging Central Excise duty. The respondent/assessee was discharging duty in terms of Rule 11 readwith Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The value was arrived at on cost construction basis i.e. 110%/115% of the cost of production on the basis of Board Circular No. 643/34/2002-CX. dated 01/07/2002. The said Circular was superseded by Circular dated 25/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that they have filed a Cross Objection in this case. He submitted that Rule 4 is not applicable as MRP based goods sold are not to be considered as "such goods" vis-`-vis the physician samples. There is no legal basis to assume that while applying Rule 11, Rule 4 should be given preference over Rule 8. The learned Counsel for the respondent/assessee strongly contested the imposition of penalty stating that the Original Authority as well as the Appellate Authority have erred in imposing penalty in this case which involves pure legal interpretation on the method to be adopted for arriving at value of free samples of medicine distributed by the respondent/assessee. There is no ground to impose penalty especially when the respondent/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les. Similar view was held by the Tribunal in Alkem Laboratories Ltd. vs. CCE & CUS, Daman reported in 2007 (213) E.L.T. 684 (Tri. - Ahmd.). Hence, we find no merit in the appeal filed by the Revenue. Accordingly, the same is liable to be dismissed. 7. In the Cross Objection filed by the respondent/assessee they have contested that for the whole impugned period they are liable to pay duty using the same cost construction method, as above. We find that the Hon'ble High Court of Bombay in the case of Indian Drugs Manufacturer's Association vs. Union of India reported in 2008 (222) E.L.T. 22 (Bom.) upheld the Circular dated 25/4/2005 issued by the Board and held that physician free samples should be valued in terms of Rule 4 of the Valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
