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2016 (2) TMI 682 - AT - Central ExciseMRP price - Demand of differential duty for the period 14/7/2004 to 06/1/2005 in terms of value to be adopted under Rule 4 of the said Rules - Held that:- As the respondent/assessee have correctly followed the valuation for the impugned goods in terms of Board Circular dated 01/7/2002. The Board has categorically stated that since the goods are not sold, Section 4 (1) (a) will not apply and the value has to be arrived at in terms of Valuation Rules. No specific Rule covered such a contingency. Except Rule 8 all other Rules cover the situation where a sale is involved. Hence, it was clarified that residuary Rule 11 will have to be adopted alongwith the spirit of Rule 8 and assessable value would be 115% of cost of manufacture of the said goods. We find in a similar situation that the Hon'ble Supreme Court in the case of Biochem Pharmaceuticals Ind. Ltd. vs. CCE, Vapi reported in (2015 (9) TMI 312 - SUPREME COURT) held that best judgment method in terms of Rule 7 of Erstwhile Central Excise (Valuation) Rules, 1975 is the correct method. The Tribunal in the case of Alkem Laboratories Ltd. vs. CCE, Daman reported in (2006 (7) TMI 30 - CESTAT, MUMBAI ) held that physician sample distributed free of cost are to be valued under Rule 11 read with Rule 8 of the Central Excise Valuation Rules. Duty liability - period of duty payment - assessee have contested that for the whole impugned period they are liable to pay duty using the same cost construction method - Held that:- We find that the Hon’ble High Court of Bombay in the case of Indian Drugs Manufacturer’s Association vs. Union of India reported in 2008 (2006 (9) TMI 94 - HIGH COURT, BOMBAY) upheld the Circular dated 25/4/2005 issued by the Board and held that physician free samples should be valued in terms of Rule 4 of the Valuation Rules. As such, we find no merit in the contention of respondent/ assessee for the period post 07/1/2005. Imposition of penalty - Held that:- We find that considering the above discussion, the issue involved in this case is one of interpretation of valuation provisions. The Board itself changed the view in 2005 superseding the instruction issued in 2002. As such, we find no justification to impose a penalty on the respondent/assessee on this issue.
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