M/S Lyka Labs Ltd vs Commissioners Of Central Excise

[ Arising out of OIA-SUR-EXCUS-002-APP-178-13-14 dtd 30.8.2013 passed by Commissioners of Central Excise, Customs and Service Tax-SURAT-II ( Appeal) ]

M/s Lyka Labs Ltd - Appellant(s)

Vs

Commissioners of Central Excise, Customs and Service Tax- SURAT-II( Appeal) - Respondent (s)

Represented by :

For Assessee : Shri S P Sheth, Advocate For Revenue : Shri Alok Srivastava, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

Date of Hearing / Decision : 30/9/2015

ORDER No. A/11386 / 2015 dtd 30/9/2015

Per : Mr.P.K. Das,

After hearing both the sides and on perusal of the records, we find that the issue involved is as to whether the Physician Samples are required to be valued at the pro-rata basis of traded goods or the same are to be valued at transactions value or value determined by cost construction method. We find on the identical issue, in the case of M/s Mepro Pharmaceuticals Pvt Ltd Vs CCE, Bhavnagar vide order No A/11368/2015 dtsd 2nd Sept. 2015 the Tribunal remanded the matter to the Adjudicating Authority to decide afresh.

2. The relevant portion of the said decision is reproduced below:

 After hearing both the sides and on perusal of the records, we find that the appellant is engaged in the manufacture of P & P Medicaments classifiable under Chapter 30 of the scheduled to the Central Excise Tariff Act 1985. Show Cause Notices were issued for the period September 2006 to March 2009 proposing demand of duty on the samples cleared by the appellant. The issue is whether the MRP Price minus abatement should be the basis of valuation of free distribution of physician samples. According to the Learned Counsel for the appellants, they have rightly cleared the samples to the brand owners on transaction value under Section 4 of the Central Excise Act, 1944. He submits that the issue is covered by the decision on the following case laws:-

(a) Sidmak Laboratories (India) Ltd. 2009 (242) E.L.T. 255 (Tri. Ahmd)

(b) Geinova Laboratories India Pvt. Ltd. 2014 (300) E.L.T. 437 (Tri.-Mum)

(c) Themis Laboratories Pvt. Ltd. 2013 (296) E.L.T. 109 (Tri.  Mum)

2. The Learned counsel also submits that the Adjudicating Authority erroneously proceeded on the basis of Rule 10 A of the Valuation Rules, 2000. He submits that in this case, the brand owners had not supplied any goods to them. On the other hand, the Learned Authorised Representative on behalf of the Revenue submits that as per agreement, it is clear that the appellant company is controlled by the brand owners. On perusal of the findings of the Adjudicating Authority, we find that, there is no clear finding on applicability of Rule 10A of the Valuation Rules. The Adjudicating Authority reproduced a portion of the agreement in the Adjudication order to substantiate that the appellant company was controlled by the brand owner. But, there is no finding on determination of duty under Section 4A of the said Act.

3. In our considered view, there is no clarity in the finding of the Adjudicating Authority, and therefore, it is difficult to decide the case on facts and law. Hence, the Adjudicating Authority is required to examine the case afresh after considering the submission of the appellants and the case laws relied upon by the appellants and to pass order in accordance with law. Needless to say that, the Adjudicating Authority shall give proper opportunity of hearing before passing the order. The appeal filed by the appellant is allowed by way of remand. We do not express any opinion on merit of the case.

3. The Learned Advocate on behalf of the appellant submits that their case is more strong than the case of M/s Mepro Pharmaceutics Pvt Ltd, which was opposed by the Learned Authorised Representative of Revenue. We find that both the sides are disputing on the facts and law of the case. Therefore, it should be re-examined by the Adjudicating authority. In view of that, we set aside the said impugned order. The matter is remanded to the Adjudicating Authority to decide afresh after considering the submissions of the appellant and the case laws. The appeal is allowed by way of remand.

(Dictated and pronounced in the Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

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