9911796707
TMI Blog2001 (5) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of production of such Physician Samples and not on the basis of the sale price of the medicine. The Revenue rejected these contentions and held that the duty is payable and that the value for assessment shall be the value adopted for assessment of the same medicines when sold in the market. The appellant persists with their contentions in the present appeal. 2. The contention of the appellant is that physician samples are distinctly different from normal trade pack with regard to quantity in each pack, colour size of outer cartons and design of the outer/inner carton of the pack. It is clearly written and conspicuously marked on each smallest packing that these Physician Samples are "not for sale". They have also pointed out that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid contentions of the Revenue, the learned DR has pointed out that the medicines cleared in trade pack and in Physician Sample Packs are one and the same. He, therefore, submitted that they are identical goods and no objection could be raised to treating identical goods as comparable goods. The learned DR also pointed out that the issue regarding valuation of Physician Samples remains settled by the decision of the Tribunal in the case of Cheryl Laboratories (P) Ltd. v. Collector of Central Excise, Hyderabad [1997 (93) E.L.T. 129 (T)]. The Tribunal held in that case that the Physician Samples are to be valued under Rule 6(b)(i) of Central Excise Rules i.e. value of comparable goods. 5. We are not able to appreciate the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh Doctors is the same as the medicine sold through shops. Ingredients, qualities and effect of the medicine which are sold and the medicines distributed free as samples are one and the same. It is only that the appellant chooses to distribute a part of the goods produced by them as a promotional measure as free samples. There is no aspect to free samples which makes them incapable of being marketed. In these circumstances, we hold that the free samples in question satisfy the criterion of marketability are goods and are liable to Central Excise duty. 6. Section 4(1)(b) of the Central Excise Act and Central Excise Valuation Rules, 1975 relate to valuation of goods which are not sold. Section 4(1)(b) stipulates that where the normal price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) if the value cannot be determined under sub-clause (i), on the cost of production or manufacture including profits, if any, which the assessee would have normally earned on the sale of such goods". In the present case, the goods are not sold by the assessee, but are freely distributed by them. From the provisions of Rule 6(b) it is clear that where sub-rule 6(b)(i) applies, 6(b)(ii) has no application. Valuation based on the cost of production as allowed under 6(b)(ii) should be resorted to only "if value cannot be determined under sub-clause (i) i.e. based on the comparable value of similar goods. In the present case there is no dispute that the medicines involved in both the cases (sale and free distribution) are one and the same. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
