Custom, Excise & Service Tax Tribunal
Omni Protech Drugs Pvt. Ltd vs Cce Pune I on 23 June, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/553/10 Mum
Arising out of Order-in-Appeal No. PI/VSK/14/2010 dated 04.02.2010 passed by the Commissioner of Central Excise (Appeals), Pune.
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Honble Shri P.R. Chandrasekharan, Member (Technical)
1. Whether Press Reporters may be allowed to see : No
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 : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
Omni Protech Drugs Pvt. Ltd.
:
Appellant
Versus
CCE Pune I
Respondent
Appearance Shri Bharat Raichandani, Advocate for appellant Shri Kishori Lal, SDR For Respondent CORAM:
Shri Ashok Jindal, Member (Judicial) Shri P.R. Chandrasekharan, Member (Technical) Date of Hearing : 23.06.2011 Date of Decision : 23.06.2011 ORDER NO.
Per Ashok Jindal The appellant has filed this appeal against the impugned order confirming the demand on account of physician samples cleared by them are to be valued as per Section 4A of the Central Excise Act, 1944.
2. Brief facts of the case are that the appellant is a job worker and clearing physician samples to the brand owner on payment of duty on the assessable value arrived at as per formula laid down by the honble apex court in the case of Ujagar Prints 1989 (39) ELT 492 (SC) on the transaction value of the physician samples cleared by them. As they were the manufacturer of P & P medicaments, they are not required to affix MRP on physician samples, they cleared the physician samples to the brand owner on payment of duty on transaction value. The Revenue was of the view that on the physician samples also, the appellants has to pay duty as per Section 4A of the Central Excise Act, 1944 i.e. MRP less abatement on pro rata basis.
3. The learned Advocate appearing for the appellant submitted that as they were being manufacturer of these physician samples which were cleared to the brand owner/buyers on jobwork basis and clearing the same following the principles laid down by the honble apex court in the Ujagar Prints (supra) i.e. cost of raw materials + conversion charges. He further submitted that in the case of Themis Laboratories Pvt. Ltd. vide Order No. A/187 to 189/2011/EB/C-II dated 01.02.2011, this Tribunal has held that if the physician samples are cleared to the principle manufacturer (brand owner) on principal to principal basis on transaction value, in that case the valuation is to be done as per Section 4(1)(a) of the Central Excise Act, 1944 not as per Section 4A ibid as MRP based. He also relied on the case of M/s Softesule Pvt Ltd. vide Order No. A/346-348/11/EB/C-II dated 13.04.2011 wherein this Tribunal has taken the same view. Therefore, the impugned order be set aside and the appeal allowed.
4. On the other hand, the learned SDR relied on the following decisions:-
1. Indian Drugs Manufacturers Association IDMA 2008 (222) ELT 22 (BOM.).
2. Cadila Pharmaceuticals Ltd. vs. Commissioner of Central Excise, Ahmedabad II 2008 (232) ELT 245 (Tri. LB).
3. Jayanti Food Processing (P) Ltd. vs. CCE Rajasthan 2007 (215) ELT 327 (S.C.).
4. Dr. Reddys Laboratories Ltd. vs. CCE Visakhapatnam 2009 (235) ELT 865 (Tri. Bang.).
5. Blue Cross Laboratories Ltd. vs. CCE Mumbai 2006 (202) ELT 182 (Tri. LB) He also submitted parawise comments in his submissions in support of his contentions.
5. Heard and considered.
6. The issue in this matter before us is that whether the physician samples cleared by the appellants to the brand owner on payment of duty on the transaction value arrived at as per the formula laid down by the honble apex court in the case of Ujagar Prints (supra) i.e. cost of raw materials + conversion charges or the physician samples manufactured on job work basis are to be cleared as per Section 4A of the Act i.e. less abatement on pro rata basis. The case law cited by the learned SDR are not relevant to the facts of the case as in those cases the manufacturers themselves manufacturing the physician samples and distributing the same to Physicians/Doctors free of cost, therefore no transaction value was available. It is an admitted fact that P & P medicaments are to be cleared on MRP basis value therefore on those cases it was held as valuation of physician samples is to be on the basis of MRP basis under Section 4A of Act..
7. In this case, it is clear that the appellant is not clearing these physician samples to the Physician/Doctor free of cost but the appellant is clearing these physician samples on transaction value arrived at after including cost of raw materials + job charges as held by the honble apex court in the case of Ujagar Prints to the brand owner on principal to principal basis. Therefore, the case laws cited by the learned SDR are not applicable to the facts of this case. The ratio laid down by the Themis Laboratories Pvt. Ltd. (supra) is that if the manufacturer clearing the physician samples to the brand owner on transaction value, the transaction value is the assessable value. Therefore, following the ratio laid down in the Tribunals decision in the case of Themis Laboratories Pvt. Ltd. (supra) we hold that the appellant has correctly valued their product i.e. cost of raw material inputs + job charges. In view of the above observations, we set aside the impugned order and allowed the appeal without going into the issue of limitation.
(Pronounced in open Court) (P.R. Chandrasekharan) Member (Technical) (Ashok Jindal) Member (Judicial) nsk 2