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TMI Blog2024 (6) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of payment of excise duty shall be done under Section 4 of the Central Excise Act, 1944. In the case of M/S USV LTD., PARVEZ K KUMANA, DILIP A PANDIT, JAYESH K VASAVADA VERSUS C.C.E. S.T., DAMAN [ 2019 (5) TMI 507 - CESTAT AHMEDABAD] , this Tribunal considering the same issue whether the partly medicament were sold through dealer in retail and partly to the institution, the Tribunal held that the goods which were supplied for the consumption of institution, the valuation provision which is correctly applicable is section 4 of Central Excise Act and not Section 4A. In view of above judgment which are exactly on the identical facts of the present case it was consistently held that in case of supply made to institutional buyer, the valuation shall be done under Section 4 and not under Section 4A of the Central Excise Act, 1944. Demand of cenvat credit on removal and retention of control samples - HELD THAT:- In this regard, the appellant s submission is that since there is a diversion view on this issue even though the appellant have admittedly paid the duty and not contesting the same, their prayer is to set aside the penalty corresponding to the duty of such control s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the present appeals before this Tribunal. 2. Shri R.C. Saxena, learned counsel appearing on behalf of the appellant submits that since the sale for institution is not a retail sale but the same is for consumption by various institutions like hospital, valuation of the same is not governed by Section 4A, therefore, the duty paid in terms of Section 4 of the Central Excise Act, 1944 in respect of supplies made for institution is correct and legal. He submits that the issue is no longer res-integra as the same has been decided in catena of case laws. He placed reliance on the following cases: USV Ltd. 2019 (5) TMI 507 Medley Pharmaceuticals Ltd. 2022 (11) TMI 41 CESTAT Ahmedabad Zydus Healthcare Ltd. 2019 (10) TMI 810 CESTAT Ahmedabad JB Chemicals Pharmaceuticals Ltd. 2023 (7) TMI 301 CESTAT AHM Sri Kaliswari Fireworks 2009 (237) ELT 324 (Tri. Chennai) Controls and Switchgears Contractors Ltd. 2005 (183) ELT 95 (Tri. D) 3. Shri A. K. Samota, Learned Superintendent (Authorized Representative) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both the sides and perused the records. 5. We fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. shall come into force on the 8th day of January, 2005. Explanation. - For the purposes of this notification, retail sale price means the retail price displayed by the manufacturer under the provisions of the Drugs (Prices Control) Order, 1995. It is noted that for the purpose of this notification, the retail sale price means the retail sale price displayed the manufacturer under the provision of Drugs (Price Control) Order 1995. The Drug (Price Control) Order 1995 in para 14 and 15 mandates as follows:- 14. Carrying into effect the price fixed or revised by the Government, its display and proof thereof : 1. Every manufacturer or importer shall carry into effect the price of a bulk drug or formulation, as the case may be, as fixed by the Government from time to time, within fifteen days from the date of notification in the Official Gazette or receipt of the order of the Government in this behalf by such manufacturer or importer. 2. Every manufacturer, importer or distributor of a formulation intended for sale shall display in indelible print mark, on the label of container of the formulation and the minimum pack thereof offered for retail sale, the retail price of that formulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int the MRP. The arguments is summarized in para 4.3.4 of the impugned order in following words. 4.3.4 Now, deliberate on the said DPCO, 1995. I observe that as per its para no. 14(2), every manufacturer of distributor of a formulation intended for sale shall display in indelible print mark, on the label of the container of the formulation and the minimum pack there offered for retail sale , the retail price of that formulation, notified in the official Gazette or referred to by the Govt. in this regard, with the words retail price not to exceed similar type of provisions have also been made in the para 15(1) of the said order in respect of non-scheduled formulations the only difference being that the words retail price not to exceed preceding it. And local taxes extra succeeding it, in the case of scheduled formulations. Similar type of provisions have also been made in the para no. 15 (1) of the said order in respect of non-scheduled formulations, the only difference being that the words retail price not to exceed preceding it, and local taxes extra succeeding it, have been replaced by the words maximum retail price preceding it and the words inclusive of all taxes succeeding it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstant case the evidence brought on record does not dispute the claim that the goods sold to institutional buyers were not sold (or offered for sale) in retail sale. In these circumstances, we hold that provisions of para 14 and 15 of DPCO 1995 are not attracted in respect of sales to institutional buyers which are not further offered for retail sale. The demand, therefore, cannot be upheld. The appeals of USV is allowed. The penalties imposed are set aside and consequently the appeals of other appellants are also allowed. The appeal of revenue is dismissed. In case of Medley Pharmaceuticals Ltd. 2022 (11) TMI 41 CESTAT AHM (supra) taking the same view this Tribunal passed the following order: 4. We have carefully considered the submissions made by both the sides and perused the records. We find that as regard the fact of the case there is no dispute that the appellant have supplied Medicament to Government Hospitals and Some Institutional Buyers. In case of such nature of transaction the medicaments are not sold in retail, therefore, retail sale price need not to be affixed. It is the submission of the appellant that they have not affixed retail sale price on such medicament and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g No. or Sub-heading No. Description Abatement as a percentage of retail sale price(1)(2)(3)(4)1.3003. 10Patent or proprietary medicaments, other than those medicaments which are exclusively Ayurvedic, Unani, Siddha, Homoeopathic or Biochemic35%2.3003. 20Medicaments (other than patent or proprietary) other than those which are exclusively used in Ayurvedic, Unani, Siddha, Homoeopathic or Biochemic systems35% This notification2. shall come into force on the 8th day of January, 2005.Explanation. -For the purposes of this notification, retail sale price means the retail price displayed by the manufacturer under the provisions of the Drugs (Prices Control) Order, 1995. It is noted that for the purpose of this notification, the retail sale price means the retail sale price displayed the manufacturer under the provision of Drugs (Price Control) Order 1995. The Drug (Price Control) Order 1995 in para 14 and 15 mandates as follows:- 14. Carrying into effect the price fixed or revised by the Government, its display and proof thereof: 1. Every manufacturer or importer shall carry into effect the price of a bulk drug or formulation, as the case may be, as fixed by the Government from time to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institutional supplies made through dealers was found. In fact whatever evidence was produced showed that the products contained the marking hospital supply-not for sale only.4.2The impugned order has picked up the words formulation intend for sale appearing in para14 and para15 of the Drugs (Price Control) Order 1995 and come to the conclusion that it was mandatory in the facts and circumstances of the case to print the MRP. The arguments is summarized in para 4.3.40f the impugned order in following words. 4.3.4Now, deliberate on the said DPCO, 1995. I observe that as per its para no. 14(2), every manufacturer of distributor of a formulation intended for sale shall display in indelible print mark, on the label of the container of the formulation and the minimum pack there offered for retail sale , the retail price of that formulation, notified in the official Gazette or referred to by the Govt. in this regard, with the words retail price not to exceed similar type of provisions have also been made in the para 15(1) of the said order in respect of non-scheduled formulations the only difference being that the words retail price not to exceed preceding it. And local taxes extra succe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on goods offered for retail sale . In the impugned order, it is seen that the words offered for retail sale appearing in DPCO 1995 have been overlooked. The said order only relies on the word sale and upholds the applicability of the DPCO 1995 to all sales. We find that the sale appearing in para 14 and 15 of DPCO 1995 is only to be read in respect of the goods offered for retail sale . In the instant case the evidence brought on record does not dispute the claim that the goods sold to institutional buyers were not sold (or offered for sale) in retail sale. In these circumstances, we hold that provisions of para 14 and 15 of DPCO 1995 are not attracted in respect of sales to institutional buyers which are not further offered for retail sale. The demand, therefore, cannot be upheld. The appeals of USV is allowed. The penalties imposed are set aside and consequently the appeals of other appellants are also allowed. The appeal of revenue is dismissed. In view of above, we find that there is no merit in Revenue's allegation that such medicaments which are intended for consumption by the institutional buyers and not intended for retail sale are liable to be assessed under section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in the corresponding entry in column (2) of the said Table, as the goods to which the provisions of the said sub section (2) shall apply, and allows as abatement the percentage of retail sale price mentioned in the corresponding entry in column (4) of the said Table:- TABLES. No. Chapter or Heading No. or Sub-heading No. Description Abatement as a percentage of retail sale price(1)(2)(3)(4)1.3003. 10Patent or proprietary medicaments, other than those medicaments which are exclusively Ayurvedic, Unani, Siddha, Homoeopathic or Biochemic35%2.3003. 20Medicaments (other than patent or proprietary) other than those which are exclusively used in Ayurvedic, Unani, Siddha, Homoeopathic or Biochemic systems35% This notification2. shall come into force on the 8th day of January, 2005.Explanation. -For the purposes of this notification, retail sale price means the retail price displayed by the manufacturer under the provisions of the Drugs (Prices Control) Order, 1995. It is noted that for the purpose of this notification, the retail sale price means the retail sale price displayed the manufacturer under the provision of Drugs (Price Control) Order 1995. The Drug (Price Control) Order 1995 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that investigations were extended to various customers/ dealers and in para 9 of the impugned order the list of customers has been enumerated. The gist of the investigation is reproduced in para 10,11,12 and 13 of the impugned order. The investigations confirmed that no evidence of printing of MRP on institutional supplies made through dealers was found. In fact whatever evidence was produced showed that the products contained the marking hospital supply-not for sale only.4.2The impugned order has picked up the words formulation intend for sale appearing in para14 and para15 of the Drugs (Price Control) Order 1995 and come to the conclusion that it was mandatory in the facts and circumstances of the case to print the MRP. The arguments is summarized in para 4.3.40f the impugned order in following words. 4.3.4Now, deliberate on the said DPCO, 1995. I observe that as per its para no. 14(2), every manufacturer of distributor of a formulation intended for sale shall display in indelible print mark, on the label of the container of the formulation and the minimum pack there offered for retail sale , the retail price of that formulation, notified in the official Gazette or referred to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is only the items which are sold in retail. If a container is sold in retail, the container must contain retail sale price and if the content of such container are also sold in retail then each such pack sold in retail must have the MRP printed on it. From above it is apparent that the provisions are attracted only on goods offered for retail sale . In the impugned order, it is seen that the words offered for retail sale appearing in DPCO 1995 have been overlooked. The said order only relies on the word sale and upholds the applicability of the DPCO 1995 to all sales. We find that the sale appearing in para 14 and 15 of DPCO 1995 is only to be read in respect of the goods offered for retail sale . In the instant case the evidence brought on record does not dispute the claim that the goods sold to institutional buyers were not sold (or offered for sale) in retail sale. In these circumstances, we hold that provisions of para 14 and 15 of DPCO 1995 are not attracted in respect of sales to institutional buyers which are not further offered for retail sale. The demand, therefore, cannot be upheld. The appeals of USV is allowed. The penalties imposed are set aside and consequently the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al buyers themselves. In the case of USV ltd., following has been observed: 4. We have gone through rival submissions. We find that these products were brought into the fold of section 4A assessment by notification No. 2/2005-CE(NT) dated 07.01.2005 which reads as under: Medicaments - Assessments on basis of retail sale price (MRP)In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby specifies the goods mentioned in column (3) of the Table below and falling under Chapter or Heading No. or Sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) mentioned in the corresponding entry in column (2) of the said Table, as the goods to which the provisions of the said sub section (2) shall apply, and allows as abatement the percentage of retail sale price mentioned in the corresponding entry in column (4) of the said Table:- TABLES. No. Chapter or Heading No. or Sub-heading No. Description Abatement as a percentage of retail sale price(1)(2)(3)(4)1.3003. 10 Patent or proprietary medicaments, other than those medicaments which are exclusively Ayurved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Price Control on a green strip: Provided that in the case of a container consisting of smaller saleable packs, the retail price of such smaller pack shall also be displayed on the label of each smaller pack and such price shall not be more than the pro-rata retail price of the main pack rounded off to the nearest paisa. A perusal of the aforesaid provisions shows that the requirement of printing the MRP is in respect of products offered for retail sale . Therefore, if the product is not offered for retail sale, the said provision of Rule 14 15 will not apply. In the present facts and circumstances, we need to examine whether if the provisions of Rule 14 or 15 could be attracted. 4.11t is seen that investigations were extended to various customers/ dealers and in para 9 of the impugned order the list of customers has been enumerated. The gist of the investigation is reproduced in para 10,11,12 and 13 of the impugned order. The investigations confirmed that no evidence of printing of MRP on institutional supplies made through dealers was found. In fact whatever evidence was produced showed that the products contained the marking hospital supply-not for sale only. 4.2 The impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r non-scheduled formulations intends to sell the said formulations, he shall display, in indelible print mark, on the label of the container of the formation as well as on the minimum pack thereof offered for retail sale, the retail price or maximum retail price thereof. The argument in the impugned order being that the goods intended for ultimate sale to institutional buyers, are first sold to dealer/ distributors. Thus, when they are sold to dealers/ distributors the provision of DPCO 1995 get attracted. It is seen that the DPCO 1995 mandates, printing of retail sale price on containers as well as on minimum pack thereof offered for retail sale . From above it is apparent that what is covered in DPCO is only the items which are sold in retail. If a container is sold in retail, the container must contain retail sale price and if the content of such container are also sold in retail then each such pack sold in retail must have the MRP printed on it. From above it is apparent that the provisions are attracted only on goods offered for retail sale . In the impugned order, it is seen that the words offered for retail sale appearing in DPCO 1995 have been overlooked. The said order onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeals are allowed. In view of above judgments which are exactly on the identical facts of the present case it was consistently held that in case of supply made to institutional buyer, the valuation shall be done under Section 4 and not under Section 4A of the Central Excise Act, 1944. There is other small issue of demand of cenvat credit on removal and retention of control samples. In this regard, the appellant s submission is that since there is a diversion view on this issue even though the appellant have admittedly paid the duty and not contesting the same, their prayer is to set aside the penalty corresponding to the duty of such control samples. We find force in the argument of the appellant, since the appellant have given up the merit in this case, we are not addressing the same, therefore, the payment of cenvat credit/ duty on the control sample is not under dispute and the same is maintained. However, considering the issue being debatable , the penalty is not imposable, hence, the penalty corresponding to the duty on Control Sample is set aside. 7. Considering the above settled legal position, we are of the view that in the present case also, the impugned orders are n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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