Custom, Excise & Service Tax Tribunal
Bausch & Lomb Eyecare ( India) Pvt. Ltd vs C.C.E., Jaipur on 10 November, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing/decision: 10.11.2016 Central Excise Appeal No.150 of 2009 Arising out of the order-in-appeal No.214(DK)CE/JPR-I/2008 dated 20.10.2008 passed by Commissioner of Central Excise (Appeals), Jaipur. Bausch & Lomb Eyecare ( India) Pvt. Ltd. .. Appellant Vs. C.C.E., Jaipur Respondent
Appearance:
Present Shri Vipul Agarwal, Advocate for the appellant Present Shri G.R. Singh, A.R. for the respondent Coram: Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. Ashok K. Arya, Technical Member Final Order No. 55059/2016 Per Justice (Dr.) Satish Chandra:
The present appeal is filed against the order dated 20.10.2008 passed by the Commissioner (Appeals), Central Excise, Jaipur in Appeal No.214/2008. The period in dispute is from April 2006 to March 2007.
2. The brief facts of the case are that the appellant is engaged in the manufacture of Lens Care Solution falling under Tariff Heading 3307. The appellant sells ReNu lens care solution in 120 ml. bottles at the assessable value of Rs.87 per bottle and pays duty thereon.
3. During the period in question, the appellant was selling the sample packs of ReNu lens care solution 60 ml bottle to the distributors @ Re. 1 per bottle and paid duty thereon. The distributor was giving the samples of 60 ml bottle as a part of the welcome kit where the welcome kit was comprised of lens case and instruction kit, and was given along with the trial lenses to the customer for free as a marketing strategy to promote sales of the product.
4. The Departmental authorities objected to the practice of payment of duty on transaction value of Re 1 per bottle contending that the goods were meant to be samples and not sold. Thereafter, appellant started paying excise duty on the sample bottles under Rule 8 of the Valuation Rules i.e. cost of production plus 10% under protest. The objection raised by the Department culminated into the issuance of periodical show cause notices. The impugned notices alleged that that the bottles of lens care solution cleared by the appellant were required to be valued based on the price of comparable goods i..e. half the price of 120 ml bottle meant for retail sale, thus, accordingly, for 60 ml bottles, the assessable value was worked upon by the Department to Rs.43.50 per bottle & Rs.10.30 per bottle, as applicable for the respective period.
5. After hearing both the sides and on perusal of the record, it appears that an identical issue came up before this Tribunal in the assessees own case [M/s Bausch and Lomb Eyecare India Pvt. Ltd. vs. C.C.E., Jaipur 2015 TIOL 1495 CESTAT DEL] where it was observed as under :-
10. After hearing both the sides, we find that short question required to be decided in the present appeal is as to whether the value of Re. 1/- adopted by the appellant in respect of the small bottles of 60 ml of Lens Care Solution is the correct assessable or the value has to be raised, by adopting the value of the full commercial bottle of 120 ml. We note that an identical issue was considered by the Tribunal in the case of Sun Pharmaceutical Industries Versus Commissioner of C. Ex., Surat-II reported in 2005 (183) E.L.T. 42 (Tri.- Mumbai) = 2005 TIOL 123 CESTAT - MUM and it was held that inasmuch as the smaller packs were being sold by the assessee, though they were meant for further free distribution by the distributors, the price at which the same were being sold represents the transaction value and is required to be adopted as the assessable value in terms of the provisions of Section 4. We further find that on appeal against the said decision by the Revenue, the Honble Supreme Court in the case of Commissioner of Central Ex. & Cus, Surat Versus Sun Pharmaceuticals Inds. Ltd. reported in 2015 (326) E.L.T 3 (S.C.) observed that in the absence of any allegation made by the Revenue that the price at which the samples meant for free distribution were being sold by the assessee to distributors was not the sole consideration, such consideration fulfills the requirement of Section 4 (1)(a) of Central Excise Act, 1944. The fact that physician samples were further given free of cost by the distributors as no price was charged by the distributors, the case cannot be held to be not covered by the provisions of Section 4 (1) (a) of the Act. The said argument of the Revenue would be fallacious and wrong reason. The transaction is between the assessee and their distributors at the price charged by the assessee from the distributors and what the distributors ultimately did with these goods is extraneous and cannot be the relevant consideration to determine the valuation of the excisable goods.
11. In the present case also, we find that the Revenues entire case for enhancement of the price is based upon the fact that the distributors were giving the said packs free of cost, as a promotional scheme. Revenue has otherwise not doubted the fact that the consideration received by the assessee from the distributor is not the consideration or something more has flown back. In the absence of any such allegation much less any evidence, the ratio of law declared by the Honble Supreme Court is fully applicable.
12. In view of the foregoing, we set aside the impugned order and allow the appeal with consequential relief to the appellant.
6. In view of the aforesaid legal position, we allow the appeal by setting aside the impugned order. The appellant will get relief accordingly.
(Justice Dr. Satish Chandra) President (Ashok K. Arya) Technical Member scd/ Appeal No.E/150/2009 1