following question of law for our
consideration and decision:-
"Whether Physician samples manufactured and distributed as
free samples have to be assessed ... Cheryl Laboratories (P) Ltd., held that the value of
Physician samples should be determined in accordance with the
principle laid down in Rule
2005. It was also noticed that the assessable value of physician samples was lower than the assessable value of the same medicaments cleared in trade ... enquiry, the appellants submitted that they were not clearing the physician samples for free distribution to the doctors but are selling to other companies
valuation of medicines cleared by the appellant as "Physician Samples". The appellants, a manufacturer of P & P medicines, submitted that Physician Samples ... charged based only on the cost of production of such Physician Samples and not on the basis of the sale price of the medicine
medicament as contract manufacturer. The dispute in regarding valuation of physician samples when the appellant has manufactured and cleared physician samples which ... distributed free by the principal manufacturer. Appellant is clearing such physician sample by determining value as per Section 4 (1) (a) of the Central Excise
value of physician samples. There are two types of transactions involved in the clearance of such samples. In case the samples of pharmaceutical products ... distributed the samples to the physicians free of cost. In such transaction the appellant discharged duty on such physician samples based on the transaction value
Central Excise Act, 1944. The dispute relates to valuation of physician samples cleared by the assessee during the period 25.4.2005 to 31.10.2005. The original authority ... respondent.
3. It is the submission of the learned DR that physician samples have been manufactured and cleared on payment of duty by the respondent
medicines. During the period August 1995 to May 2000, they cleared physicians samples on payment of duty determining the value of such samples under Rule ... physician samples should cany an inscription that they are not for sale and such samples shall not be sold. The value of such samples which
appeal against the impugned order confirming the demand on account of physician samples cleared by them are to be valued as per Section ... 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
them. Apart from the regular medicaments, the appellants are also manufacturing physician samples. In some of the cases, such physician samples are being manufactured ... dispute in the present appeals relate to the valuation of such physician samples.
3. As we find that there are two types of physician samples
physicians' samples would be 115% of the cost of production of such samples.
2. All the appeals pertained to valuation of Physician Samples ... physician samples. Under Drug Price Control order the samples are forbidden from being sold. There is no dispute that the samples in question are distributed
