9911796707
TMI Blog2019 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. 2. The appellant/assessee is a pharmaceutical company availing benefit of SSI exemption. They participated in a tender floated by the Directorate of Medical and Educational Research (DMER), Government of Maharashtra for supply of designated medicines to various hospitals and were awarded a rate contract. As per the terms of tender notice, tenders will be accepted only from the manufacturers who can either supply directly or appoint distributors. The appellant firm appointed distributors. Thereafter they cleared the goods to their distributors who, in turn, supplied the goods to various hospitals as per the rate contract. Evidently, the medicines were sold by the assessee to their distributors at a lower rate and thereafter the dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant would submit that show cause notice was issued under the mistaken notion that old Sec.4 of the Central Excise Act, 1944 when normal price was applicable, is still applicable for a case pertaining to 2003 as may be seen in Para 4.18 of the show cause notice. The concept of transaction value was introduced w.e.f. 01.07.2000 and their sales to their distributors were on principal to principal basis and there was a transaction value and the distributors were not created by them artificially but it was a part and parcel of the tender notice floated by the Government of Maharashtra itself. Evidently, if a distributor is appointed, he will need his margin and will not render free service. Sale to the Government of Maharashtra is as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative reiterates the submissions in the impugned order. He would submit that appellant had won the rate contract for supply of products to the Government hospitals and these were supplied under the cover of delivery challans. The distributors were acting on their behalf and were raising bills to collect payments from the Government hospitals. On the Central Excise invoices raised by the appellant to their distributors, it is clearly mentioned as clearance under from 'F' which means clearances were made as stock transfer. As per the rate contract the goods intended to be supplied to the Government hospitals shall be labelled as "for use of Government of Maharashtra". No products marked "for Government of Maharashtra" could be sold to public. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebited as "being amount of rate revision allowed on supplies made to DMER." As per Sec.11D every person who has collected any amount from the buyer in any manner representing duty of excise shall forthwith pay the amount so collected to the credit of Central Government. 7. We have considered the arguments on both sides and perused the records. The facts of the case are not in dispute that the appellant won the tender to supply medicines to the Government hospitals as per rate contract awarded by DMER, Government of Maharashtra. The contract itself allowed the appellant to appoint distributors or supply medicines directly. The appellant chose to appoint distributors and raise invoices on them who in turn, would raise invoices on DMER as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence, has to be supplied goods at a price lower than the contract price. Therefore, we find no infirmity in the assessee paying duty on transaction value between them and the distributor and not on the transaction value between the distributor and DMER. The allegation of the department that consignments were sent directly to the hospitals also does not carry their case any further because the movement of goods to the distributors premises first and subsequently to the hospitals or directly from the assessee to the hospitals makes no difference as long as the two transactions are in place. 9. As far as the demand under Sec.11D is concerned, we do find that prior to Finance Act, 2008, only such persons who are liable to pay duty had to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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