Custom, Excise & Service Tax Tribunal
G.S. Pharmbutor Pvt. Ltd vs C.C.E., Jaipur I on 4 July, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-DB
COURT III
Excise Appeal No.E/1021/2008-EX [DB]
[Arising out of Order-in-Original No.7/2008 dated 17.03.2008 passed by the Commissioner of Central Excise, Jaipur-I]
For approval and signature:
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. R.K. SINGH, MEMBER (TECHNICAL)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
G.S. Pharmbutor Pvt. Ltd. Appellant
Vs.
C.C.E., Jaipur I Respondent
Present for the Appellant : Shri.B.L.Narasimhan, Advocate
Present for the Respondent: Shri.Yogesh Agarwal, D.R.
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
HONBLE MR. R.K. SINGH, MEMBER (TECHNICAL)
Date of Hearing/Decision: 04.07.2016
FINAL ORDER NO. 52513/2016
PER: S.K. MOHANTY
Heard both sides.
2. The short question involved in this appeal for consideration by this Tribunal is as to whether supply of physician samples of medicine should attract the valuation Provisions contained in Section 4 (1) (a) of the Central Excise Act or should be valued as per the Provisions contained in Section 4 A of the said Act. The issue involved in this case is squarely covered by the decision of this Tribunal in the case of Themis Laboratories Pvt. Ltd. vs. C.C.E., Mumbai reported in 2012 (286) ELT 244 (Tri. Mumbai). The relevant paragraphs of the said decision is extracted herein below:-
13.?As contended by the DR that as the physician samples are made free of sale and the medicaments are governed by MRP based valuation and these physician samples are for free distribution, the valuation is to be arrived on value of the comparable goods as held by the Honble High Court of Bombay in the case of IDMA (supra). We find in the case of IDMA (supra), the facts are somehow different from the facts in hand as in the case of IDMA, the physician samples were cleared by the manufacturers themselves, where there was no transaction value was available at the time of clearance of the physician sample, which is not in the cases here, these physician samples are cleared to the brand owner/buyers on a transaction value, which were further distributed/delivered by the buyer free of cost to the physicians/doctors.
14.?The facts of the case of Mayer Health Care Pvt. Ltd. (supra) are similar to the facts of these cases where the appellants were the manufacturer of pharmaceutical goods on its own as well as on loan licencee basis. The buyers generally desire to give some of the products on free samples to the doctors and hospitals. Accordingly, they instruct the appellant to put the label as free sample on the products. In case of loan licencee, the appellant discharged the duty based on Rule 8 read with Rule 11 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules. In case of manufacture of their own goods, which are ultimately given as free sample by the buyer, the duty has to be discharged on the transaction value. In that case, this Tribunal has observed as under :-
The point to be appreciated is if an item is sold by the manufacturer or cleared for a consideration, then duty is payable on the transaction value in terms of Section 4 of the Central Excise Act. and finally this Tribunal has observed that the samples are not distributed by the appellants free but cleared on receipt of consideration. Hence, the Central Excise duty is payable on transaction values.
15.?Reliance placed by the ld. DR in the case of C.C.E., Daman v. Sun Pharmaceuticals Ltd. (supra) is not applicable to the facts of this case, as in that case the facts are not similar to the case in hand. In fact in that case, the delivery and distribution of physician samples were under the control of the assessee himself and the medical representative (who are the employees of the representative) distributed free samples to the physicians even after the sale of samples to M/s. Aditya Medisales Ltd., Bhiwandi. The sale to M/s. Aditya Medisales Ltd., was deliberately created on paper and therefore, cannot be said to be a transaction on principal to principal basis, the price is not the sole consideration. Hence, the reliance placed by the DR is of no help.
16.?As held by this Tribunal, in the case of Mayer Health Care Pvt. Ltd. (supra) that the samples are not distributed by the appellants free but cleared on receipt of consideration. Hence, the excise duty is payable on transaction value and it is admitted fact in the cases in hand that these physician samples were cleared by the appellant on principal to principal basis on a transaction value, which was admissible at the time of clearance of the physician samples, than the transaction value is to be determined as per Section 4(1)(a) of the Act. Accordingly, the impugned orders are set aside and it is held that the appellants have correctly valued the physician samples cleared by them on transaction value/as per CAS-4. Therefore, all the appeals are allowed with consequential relief (if any).
3. In view of the settled position of law, we do not find any merits in the impugned order, and thus, allow the appeal in favour of the appellant.
[Dictated and pronounced in the open Court)
(R.K. SINGH) (S.K. MOHANTY)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
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