M/S. Talson Pharmaceuticals vs C.C.E. Delhi-Ii

[Arising out of Order-In-Appeal No. 14/CE/D-II/2011 dated: 10.01.2011 passed by Commissioner (Appeals) Delhi-II]

For approval and signature:

Hon'ble Mr. Rakesh Kumar, Member (Technical)

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

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?

M/s. Talson Pharmaceuticals ...Appellant

Vs.

C.C.E. Delhi-II Respondent

Appearance:

Mr. R.K. Philips, Advocate for the Appellants

Mr. R.K. Grover, DR for the Respondent

CORAM:

Hon'ble Mr. Rakesh Kumar, Member (Technical)

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing/decision.12.02.2015

FINAL ORDER NO. 50409 /2015-Ex(Br)

Per Rakesh Kumar (for the Bench):

The point of dispute in this case is the valuation of physicians samples cleared by the appellant, who are a manufacturer of P&P medicines. While the appellant have paid duty in respect of clearances of free sample on the transaction value, at which the like goods were sold to independent buyers, according to the Department, the assessable value has to be determined under section 4A that is on the basis of proportionate MRP minus abatement. It is on this basis, that the Assistant Commissioner vide order-in-original dated 30.09.2009 confirmed the duty demand of Rs. 3,76,723/- against the appellant, along with interest and imposed penalty of equal amount of them. On appeal being filed to Commissioner (Appeals) against this order, the same was dismissed vide order in appeal dated 10.01.2011 against which this appeal has been filed.

2. Heard both the sides.

3. Shri R K Philips, Advocate, the Ld. Counsel for the appellant, pleaded that in respect of clearances of physicians samples, as per the provisions of Drugs and Cosmetics Act and Rules made there under, the MRP is not required to be declared on the physician samples, that since there is no requirement for declaration of MRP on the physicians samples, the provisions of section 4A would not be applicable and hence, their assessable value has to be determined under section 4 of the Central Excise Act, 1944 read with Rule 4 of the Central Excise Valuation Rules, that in this regard, he relies upon the Tribunals Judgment in the case of CCE Daman vs Sidmak laboratories India Ltd. [2009(242) ELT-255 (Tri. Ahmd.)] wherein it was held that when the physician sample are sold by an assessee at a particular price to another person who used them for free distribution, the assessable value is to be determined under section 4, that ratio of this judgment would be applicable even when physicians samples are cleared by the manufacturer directly for free distribution among the physicians, that the Larger Bench Judgment of the Tribunal in the case of Cadila Pharmaceuticals Ltd. Commr. of C. Ex. Ahmadabad-II, reported in 2008 (237) ELT 242 (Tri. LB) relied upon by the Department, is not correct and that in view of the above submissions, the impugned order is not correct.

3. Shri R.K. Grover, the Ld. DR defended the impugned order by relying upon the Tribunals judgment in the case of Cadila Pharmaceuticals Ltd. Commr. of C. Ex. Ahmadabad-II, reported in 2008 (237) ELT 242 (Tri. LB), wherein it was held that the value of physicians samples has to be determined as per the provisions of section 4A, as physician samples are not different from other goods sold except for the difference in quantity or packing. He, therefore, pleaded that there is no infirmity in the impugned order.

4. We have considered the submissions from both the sides and perused the records. The issue of valuation of physicians sample cleared by a manufacturer for free distribution among the physicians has been considered at length by the Larger Bench of the Tribunal in the case of Cadila Pharmaceuticals Ltd. Commr. of C. Ex. Ahmadabad-II, (Supra) and the Larger Bench has decided that value of physician samples is to be determined under section 4A as the physician samples are not different from other goods sold except for difference in quantity or packing. The Larger Bench Judgment of the Tribunal is binding on this Bench. In view of this, we do not find any infirmity in the impugned order. The appeal is dismissed.

(Dictated and pronounced in open court)

(Rakesh Kumar)

Member (Technical)

(S.K. Mohanty)

Member(Judicial)

Neha

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