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TMI Blog2024 (6) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... etermination of Price of Excisable Goods) Rules, 2000, since the same were not cleared for captive consumption.' Extended period of limitation - penalty - HELD THAT:- The demand for the normal period of limitation has to be recalculated in the light of the principle of law referred to in the said judgment. However, since the issue relates to determination of assessable value which rests on interpretation of law and the appellant had disclosed the assessable value at the time of clearance of goods from the factory and reflected in the ER1 returns periodically; therefore invocation of extended period of limitation is unwarranted and also imposition of penalty on the appellant is unjustified. The matter is remanded to the adjudicating authority for redetermination of the duty and interest for the normal period following the principles of law laid down, after observing principles of natural justice - Appeal allowed by way of remand. - HON'BLE DR. D. M. MISRA , MEMBER ( JUDICIAL ) And HON'BLE MRS R BHAGYA DEVI , MEMBER ( TECHNICAL ) Mrs. Yovini Rajesh Rohra , Advocate , for the Appellant Mr. H. Jayathirtha , Superintendent ( AR ) , for the Respondent ORDER PER : DR. D. M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86) ELT 244 (Tri. Mum.)] viii. Mayer Health Care Vs. Asst. Commissioner of CE, Bangalore-II [2009(247) ELT 488] 4. On the issue of invoking extended period of limitation, she has submitted that the duty has been paid on the assessable of law prevailing at the relevant time applicable to their case. No facts was suppressed nor misdeclared. When the issue is interpretation of law, invoking extended period and imposition of penalty is bad in law. 5. Learned AR for the Revenue has submitted that the issue has been considered at length by this Tribunal in the case of Wallace Laboratories P. Ltd. Vs. CCE, Belgaum [Final order No.20136-20138/2024 dt. 14/03/2024] where the Tribunal referring to the principle of law settled in this regard held that the physician samples cleared to the principal manufacturer are to be assessed under Rule 4 read with Rule 11 of the Central Excise Valuation Rules, 2000 instead of Rule 8 of the said Valuation Rules, 2000. 5. Heard both sides and perused the records. 6. The short issue involved in the present appeal is whether the assessable value of physician samples manufactured and cleared be determined, following Rule 4 read with Rule 11 of the Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 8 of the 2000 Rules by adding 15% profit to the cost of manufacture. Such a determination of the assessable value has not been accepted by the Supreme Court. The Commissioner (Appeals), therefore, committed no illegality. 9. We also find that the Larger Bench of the Tribunal in the case of Cadila Pharmaceuticals Ltd. (supra) has held as under:- 22. Medicaments came to be notified as specified goods under Section 4A of the Act in January, 2005. Thus, when sold in packages or bottles, the MRP is to be treated as the value of medicines for purpose of Central Excise duty. The point for consideration is what shall be the assessable value of physician s samples which are not sold in market and are supplied free of cost. Since the physician s samples are not sold and they do not have MRP mentioned on them, the assessable value has to be determined in accordance with the provisions of the Valuation Rules - as per the mandate of Section 4(1)(b) of the Act. There is no dispute between the parties on this score. 23. As mentioned above, Rules 4 to 11 of the Valuation Rules contain provisions as to the manner of determination of values. However, learned advocate for the appellant and learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of production or manufacture of such goods. 24. The same question as to whether the assessable value of the physician s samples is to be determined as per the provisions of Rule 4 or Rule 8 came up for consideration in the Bombay High Court in the case of Indian Drugs Manufacturer s Association v. Union of India - 2008 (222) E.L.T. 22 (Bom.). After elaborate discussion, the High Court came to the conclusion that rule 4 squarely applies to clearances of physician s free samples and they cannot be valued under Rule 8. Before we notice the relevant observations, it may be mentioned that the decision was rendered in the context of challenge to the validity of a circular of the Central Board of Excise Customs, being Circular No. 813, dated 25-4-2005, clarifying that the valuation of physician s free samples should be determined under Rule 4 instead of Rule 8 of the 2000 Rules. Earlier, by Circular No. 643, dated 1-7-2002 the Board had held that the valuation be done under rule 11 read with rule 8 of the Rules. 25. The Bombay High Court noticed that prior to 1-7-2000 the concept of valuation of excisable goods was based on the deemed value. The deemed value as per Section 4(1)(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngredients of Rule 4 are found lacking, it would make no difference, for, by virtue of Rule 11 of the Valuation Rules, it is the principle underlying the rule which needs to be applied consistent with other statutory provisions. The situation contemplated in Rule 8 on the other hand is completely different and alien. Rule 8 applies to cases where goods are cleared for use and consumption in the production or manufacture of other articles i.e. for captive consumption. Physician s samples are not supplied for being captively used for production or manufacture of any article; they are final products like any medicine sold in regular packs, and, therefore, the method of valuation provided in Rule 8 cannot be applied for valuation of physician s samples. 30. The fact that medicines/medicaments are specified goods within the meaning of Section 4A of the Act since January, 2005, does not appear to have been brought to the notice of the Bombay High Court but this would hardly make any difference, for, the MRP is to be treated as value of the goods i.e. deemed value in place of the transaction value under Section 4(1)(a) and it does not take the goods out of the pale of Rule 4. Besides, it ..... 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