TMI Blog2016 (12) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... and when the samples were sold by the appellant-assessee on a transaction value to the principal customer such transaction value should form basis of assessment. Regarding goods manufactured on loan licence basis where raw material and packing material were given by the principal brand owner, the appellant -assessee followed cost construction method to value the physician samples cleared by them to the principal manufacture - Held that: - Hon’ble Supreme Court in the case of Biochem Pharmaceuticals India Limited vs. CCE, Daman, Vapi [2015 (9) TMI 312 - SUPREME COURT] held that the provisions of Rule 3 to 5 of the Valuation Rules, 1975 are not applicable. We note that Rule 4 of 1975 Rules and Rule 4 of 2000 Rules are identical. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as on loan licence basis. The dispute in the present case relates to determination of value of physician samples. There are two types of transactions involved in the clearance of such samples. In case the samples of pharmaceutical products are manufactured using own raw material and packing materials, the subject goods are sold to the contractered customers who in turn 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 indicated in the invoice. The Revenue entertained a view that when similar goods were sold in trade pack covered by MRP based valuation, the same system of MRP based valuation should be followed for such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in Blue Cross Laboratories Ltd. vs. CCE, Mumbai - 2006 (202) ELT 182 (Tri. LB) and Cadila Pharmaceuticals Ltd. vs. CCE, Ahmedabad-II - 2008 (232) ELT 245 (Tri. LB). In those cases the physician samples were not sold by the appellant and as such no transaction value under Section 4 (1)(a) was available. 5. Regarding goods manufactured on loan licence basis reliance was placed on the decision of the Hon ble Supreme Court in Biochem Pharmaceuticals India Limited vs. CCE, Daman, Vapi -2015-TIOL-320-SC-CX , wherein the Supreme Court approved the determination of value on the basis of cost construction method. The period involved was both prior as well as after July, 2000. It was categorically recorded by the Hon ble Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions such physician samples were sold to the contracting customers and the appellant -assessee adopted the transaction value for purpose of discharging Central Excise duty. In another set of transaction where such physician samples alongwith trade pack were manufactured by the appellant - assessee based on raw material, packing material supplied by the licence holder and the manufacture is on loan licence basis. The value of physician samples were arrived at by the appellant - assessee on cost construction basis and following the principles of Rule 8 for discharging duty on 110% of cost of production. In both these situations the Revenue contended that the valuation of physician samples should be in terms of Rule 4 which talks about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the physician samples were sold and the transaction value is not questioned for any reason, the same has to be accepted for payment of Central Excise duty. Further, we find the Board Circular dated 25.04.2005 will apply to cases where when the samples were distributed free by the manufacturer. In the present case, there is a sale transaction and the manufacturer is selling the physician samples to the principal customer who may later distribute it free to the physician. In such circumstances, we find the reliance placed on the Larger Bench decision of the Tribunal is not appropriate. 10. The Tribunal in Gelnova Laboratories (supra) held that when the physician samples were manufactured on principal to principal basis the same ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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