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(iii) Physician samples manufactured and cleared by the respondent for free distribution to doctors, duty stands paid on the basis of cost construction as at (ii) above.

4. Learned DR submits that she is not pursuing the demand in respect of clearances made under Sl. No.(i) above. In respect of clearances under Sl. No.(ii) & (iii), the original authoritys order is to the effect that duty needs to be paid in terms of CBEC Circular No.813/10/2005-CX dated 25.4.2005 in which it has been clarified that in the case of free samples, the value should be determined under Rule 4 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. In effect, this would mean that the value to be adopted for physician samples should be arrived at on proportionate basis on the basis of the value of trade packs of the same medicine. She further relied upon the decision of the Honble Bombay High Court in the case of Indian Drugs Manufacturers Association: 2008 (222) E.L.T. 22 (Bom.) in which such a view has been upheld. Similar views have also been echoed in the following cases:

(i) Blue Cross Laboratories Ltd.: 2006 (202) E.L.T. 182 (Tri.-LB)
(ii) Cadila Pharmaceuticals Ltd.: 2008 (232) E.L.T. 245 (Tri.-LB)
(iii) Allianz Bio Sciences Pvt. Ltd.: 2012 (283) E.L.T. 284 (Tri.-Chennai) She finally prays that the Commissioner (A)s order which has set aside the original authorities order and has upheld the assessees practice of paying duty on the basis of cost construction as per CAS-4 standards.

5. Learned CA, on the other hand submitted that the Honble Bombay High Courts judgment in the case of Indian Drugs Manufacturers Association (supra) has been delivered in the contest of physician samples supplied free of cost to the doctors. He submits that this is not the controversy in the present appeal. The dispute in the present case covers physician samples manufactured by the respondent on their own account and also on job work basis for the brand name owners where no sale is involved and hence transaction value is unavailable. In such cases, the CBECs clarification as well as the Honble Bombay High Courts decision can be distinguished. He further submitted that in the case of Geltech Pvt. Ltd. vs. CCE (assessees earlier name), on the same issue for an earlier period already stands decided by the Honble Tribunal in their favour vide Final Order No.20009-20020/2016 dated 13.01.2016, in which it has been held that physician samples manufactured and sold to the brand owner are to be assessed at transaction value in line with the decision of the apex court in the case of Sun Pharmaceuticals Industries Ltd.: 2015 (326) E.L.T. 3 (S.C.). The issue is also settled in their favour in the cases of Softesule Pvt. Ltd.: 2011 (271) E.L.T. 445 (Tri.-Mumbai) and Mayer Health Care Pvt. Ltd.: 2009 (247) E.L.T. 488 (Tri.-Bang.).

6. The duty demand in the present case to the extent of Rs.28,31,993/- has been raised (i) on sale of physician samples to brand name owners; (ii) on clearances of physician samples on their own account and also as a job worker on loan licensee basis. Revenue is not pressing the appeal in respect of clearances made on a price contracted for sale as a loan licensee. Revenue is canvassing a view that valuation of physician samples in both the above cases needs to be done in terms of CBEC Circular dated 25.4.2005 which requires valuation to be done on the basis of Rule 4 of the Valuation Rules. On this basis, the samples have to be valued proportionately to that of the trade packs (which are sold on MRP) of the same medicines. Revenue has also relied upon the decision of the Honble Bombay High Court and other cases. We have seen the judgments cited by the learned DR. The Honble Bombay High Courts judgment has been delivered on a challenge by the Indian Drugs Manufacturers Association to the CBEC Circular dated 25.4.2005. The Honble Bombay High Court upheld the Circular, however, the facts of the case clearly indicate that it has dealt only with the physician samples which are distributed free of cost to the doctors by the manufacturers. In the instances covered by the present case, the physician samples have been (i) sold to the brand owners on a principal basis; (ii) cleared on payment of duty as job workers on loan licensee basis or on own account. In the case where the samples have been sold to the brand name owners, the matter stands settled by the apex court in the case of Sun Pharmaceuticals Indus. Ltd.: 2015 (326) E.L.T. 3 (S.C.) wherein the apex court has held as follows:

9.?As per the aforesaid provision, it is the transaction value which is to be determined and on which excise duty is payable.
10.?As mentioned above, the assessee had put up the defence that since physician samples were not meant for sale by distributors but were to be given free of cost to the physicians, the assessee had charged lesser price. This statement of the assessee had not been doubted. The only reason in the show cause notice given was that since the physician samples were given free of cost by the distributors and no price was charged, the case was not covered by the provisions of Section 4(1)(a) of the Act. This is clearly fallacious and wrong reason. The transaction in question was between the assessee and the distributors. Between them, admittedly, price was charged by the assessee from the distributors. What ultimately distributors did with these goods is extraneous and could not be the relevant consideration to determine the valuation of excisable goods. When we find that price was charged by the assessee from the distributors, the show cause notice is clearly founded on a wrong reason. The case would squarely be covered under the provisions of Section 4(1)(a) of the Act. In view thereof, the Central Excise Rules would not apply in the instant case.