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2016 (7) TMI 555 - CESTAT MUMBAI

2016 (7) TMI 555 - CESTAT MUMBAI - TMI - Valuation - inclusion of extra packing charges which is in the form of catch covers - valuation of physician samples - Held that:- the appellant has valued the physician sample based upon pro rata basis with the comparable goods available, the comparable goods being sale pack of the physician sample. - Following the decision in the case of Medley Pharmaceuticals vs. CCE, Daman [2011 (1) TMI 13 - SUPREME COURT OF INDIA] decided in favor of assessee. - Appe .....

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is a manufacturer of pharmaceutical goods and in order to promote their business, is manufacturing and clearing physician samples. For discharging central excise duty on such physician samples, the appellant arrives at valuation on the pro rata basis of the sale pack cleared by them. There is no dispute as to discharge of central excise duty on the sale pack as also on the physician samples pack on pro rata basis but the dispute is related to non-inclusion of the value of extra packing charges w .....

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and paragraphs. It is his submission that the demand made for the cost of extra packing is already included in the pro rata price of the regular pack, hence it will lead to regular taxation. It is also his submission that there was no mala fide intention as the appellant has discharged the duty liability as per their understanding while the demand has been raised in the show cause notice dated 30.4.2001 invoking extended period which is incorrect. 4. The learned departmental representative, on .....

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ules, best judgment method is to be applied and accordingly, the best judgment method has been applied in this case. 5. We have considered the submissions made by both sides and perused the records. In our considered view, the appellant has made out a case in their favour for more than one reason. 6. As already recorded herein above, the issue is regarding valuation of physician samples. The allegation of the Revenue and the findings of the lower authorities are that the physician samples which .....

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is not controverted. Secondly, we find that the issue in respect of their own sister unit wherein this Bench has held in paragraph 3 is in their favour. Thirdly, we do find strong force on the question of limitation also as the appellant had discharged the duty liability on pro rata basis is not disputed and the dispute, if any, is only regarding non-inclusion of the catch cover s value/cost. This cannot be considered as intent to evade duty and hence invoking of extended period is also incorrec .....

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vs. CCE, Daman reported in 2011 (2) SCC 601 = 2011 (263) ELT 641 (SC). After laying down the law, Their Lordships proceeded ahead and clarified the legal aspect as to the valuation of the physician sample how it has to be done in paragraphs 7 and 8 wherein Their Lordships, after considering the provisions of Rule 7 of the Central Excise Valuation Rules, held that the best judgment method can be adopted by the authorities wherein Rule 6(b) which has got two sub-rules that can be applied. Their L .....

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