Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of C. Ex. And Cus. vs Mayo India Limited on 23 September, 2000
Equivalent citations: 2001(127)ELT192(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The question for consideration in this appeal is the mode of valuation of samples of the patent and proprietary medicaments manufactured by the respondent.
2. In the order impugned in the appeal the Collector has accepted the stand of the assessee that the valuation of these goods has to be based on their cost of manufacture, and has not accepted the department's contention that it ought to be derived from the assessable value of comparable goods sold by the assessee. The appeal filed by the department seeks to have the value determined on the basis of value of the comparable goods.
3. The order of the Collector does not furnish any reason for his conclusion that the prices shown on the physician samples are clearly distinguishable. Valuation of goods which cannot be valued in terms of Clause (a), sub- section (1) of section 4 is to be determined in accordance with the provisions of the Valuation Rules. It appears to us that the proper rule that would apply is rule 7. Rule 4 obviously will not apply since the date of delivery is not known which causes the difference in value. Rule 5 will not apply because the goods are not sold. Sub-rules (a) and (c) of rule 6 will not apply because there is no sale of goods. Sub-rule (b) of rule 6 will not apply because the goods are not used or captively consumed by the manufacturer. Hence the valuation has to be determined in accordance with rule 7. In applying this rule consideration will have to be given to rule 6(c) on the value of comparable goods manufactured by the assessee or any other assessee. In the case before us the value of the goods, which are medicaments were sold by the assessee, is available, and there is no reason why this value should not be basis for valuing the subject goods which are physically and chemically the same. The fact that the goods under consideration are not sold itself is not a ground for valuing them on the basis of the value of the comparable goods. Thus it is this rule that would apply and not rule 6(b). There is no reason shown as to why this rule should not be applied. The correct valuation is to be on the basis of comparable goods after making adjustments for quantity or any other factor.
4. We, therefore, allow this appeal and set aside the impugned order. The Commissioner shall give the respondent an opportunity for producing details to justify adjustments from the value of the cost of the goods sold and after considering it the Commissioner shall pass proper orders in accordance with the principles narrated above.