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TMI Blog2016 (4) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... 00. Accordingly, a demand of Rs. 4,21,311/- was raised. The demand was confirmed by the original adjudicating authority. CRL challenged the said order before the Commissioner (Appeals). The Commissioner (Appeals) determined the value for the purpose of assessment differently for the physician samples manufactured by the CRL on their own behalf and those manufactured by the CRL as a job worker. The Commissioner (Appeals) observed as follows: "I see that there are two categories of clearances of physician samples which are manufactured on job work basis on behalf of M/s. Cosme Pharma Ltd., Bicholim and M/s. Cosme Farma Laboratories Ltd, Ponda and 2 nd is the physician samples manufactured by M/s. Cosme Remedies Ltd. on their own account and is being sold to M/s. Cosme Farma Laboratories. The question is how are these 2 kinds of physician samples to be assessed to duty. I have gone to the show cause notice and its reliance on Board's Circular No. 813/10-2005-CX dated 25/04/2005 wherein it is clarified that in respect of samples distributed free as marketing strategy as a gift, donation, the value should be determined under Rule 4 of Central Excise Valuation Rules. Now as far as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not been followed. To this, I see that the Board Circular No.813/10/2005-CX dated 25/04/2005 is more apt in the present circumstances being the situation specifically of physician samples and by the same context the specific decision of the Bombay High Court is what is to be followed." She also reduced the penalty from Rs. 4,21,311/- to Rs. 5,000/- only. Aggrieved by this order, both the M/s. Cosme Remedies Ltd., and the revenue are in appeal. 3. Learned Counsel for M/s. Cosme Remedies Ltd. argued that the matter stands settled by the decision of the Hon'ble Supreme Court in the case of Sun Pharmaceuticals Industries Ltd. - 2015 (326) ELT 3 (SC). The Hon'ble Supreme Court in the said decision had observed as follows: 10 As mentioned above, the assessee had put up the defence that since physician samples were not meant for sale by distributors but were to be given free of cost to the physicians, the assessee had charged lesser price. This statement of the assessee had not been doubted. The only reason in the show cause notice given was that since the physician samples were given free of cost by the distributors and no price was charged, the case was not covered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the rival submissions. 6. We find that there are various situations which arises while manufacturing physician samples. The manufacturer may be a manufacturing i) on job work basis for some principal manufacturer, both the trade packs and physician samples, and supplying both to the principal manufacturer, who in turn distributes physician samples free of cost, or sells to distributers for distribution free of cost. ii) on his own behalf, both the trade packs as well as the physician samples and a) distributing physician samples to distributors free of cost or b) selling physician samples to distributors for further distribution free of cost. 6.1 It is seen that the various cases cited by rival counsels fall in these different categories. In the instant case there are two situations a) CRL manufacturing the physician samples on job work basis for Cosmae Pharama Lts and Cosmae Farma Laboratories, who in turn distributes the physician samples or sells for distribution free of cost. b) CRL manufacturing for itself and selling the same to Cosmae Farma Laboratories. The CRL was paying duty on these samples on the basis of the 110% of the cost of production. The demand noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not assessing duty as envisaged in Ujagar Print's case, which requires specifying cost of all the raw materials, packing material supplied by the principal manufacturer, job charges and profit element. In fact, principal manufacturer on his own dictating the assessable value to be declared. This has come out clearly in the statement mentioned by the Ld. AR. Ld. Advocate for the appellant has not rebutted the same. Even Ld. Advocate is claiming that they are declaring value as per CAS-4. CAS-4 valuation scheme is applicable for goods meant for capative consumption, which is not the case here. Thus the transaction between appellant and principal manufacturer cannot be considered as on principal to principal basis. Under the peculiar circumstances, the only way left is to assess the value based upon M.R.P. of similar goods after giving abatement as prescribed and on proportionate basis. This is what has been ordered by Commissioner (Appeals). The said decision also tribunal observes that "in respect of physician's sample being manufactured by job worker and sold to the principal manufacturer, valuation is to be done as per Ujagar Print's judgment of Apex Court". It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the case laws cited by the learned SDR are not applicable to the facts of this case. The ratio laid down by the Themis Laboratories Pvt. Ltd. (supra) is that if the manufacturer clearing the physician samples to the brand owner on transaction value, the transaction value is the assessable value. Therefore, following the ratio laid down in the Tribunal's decision in the case of Themis Laboratories Pvt. Ltd. (supra) we hold that the appellant has correctly valued their product i.e. cost of raw material inputs + job charges. In view of the above observations, we set aside the impugned order and allowed the appeal without going into the issue of limitation." In view of above it is not open to the revenue to demand duty on the value arrived at in terms of rule 4 of the Central Excise Valuation rules. The appeal of the revenue is dismissed. 6.7 The impugned order confirms the demand under the category (b) specified in para 6.1 above. The facts of the case are that CRL is manufacturing Physician Samples for itself and selling the same to Cosme Farma Laboratories. The goods are not being distributed free of cost. The decision of the Hon'ble Supreme Court in the case of Sun Pha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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