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2019 (5) TMI 507

ection 4A of the Central Excise Act, 1944 issued SCN demanding duty - N/N. 2/2005-CE(NT) dated 07.01.2005. HELD THAT:- It is seen that investigations were extended to various customers/ dealers and in para 9 of the impugned order the list of customers has been enumerated. The gist of the investigation is reproduced in para 10, 11, 12 and 13 of the impugned order. The investigations confirmed that no evidence of printing of MRP on institutional supplies made through dealers was found. In fact whatever evidence was produced showed that the products contained the marking “hospital supply-not for sale” only - It is apparent that what is covered in DPCO is only the items which are sold in retail. If a container is sold in retail, the container must contain retail sale price and if the content of such container are also sold in retail then each such pack sold in retail must have the MRP printed on it. From above it is apparent that the provisions are attracted only on goods ‘offered for retail sale’. In the impugned order, it is seen that the words ‘offered for retail sale’ appearing in DPCO 1995 have been overlooked. In the instant case the evid .....

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sales through distributors which are intended for ultimate retail sale and on such product the MRP is printed were assessed in terms of Section 4A of Central Excise Act, 1944. He pointed out that in case of sale to Distributors for further sale to institutional buyers there is no MRP printed, as the goods supplied were not meant for retail sale but for use by the said institutional buyers or their employees/ families. He argued that there is no requirement in the Drug (Price Control) Order 1995 to affix the MRP on the bulk pack in which the said medicines were being supplied to institutional buyers. He argued that the provisions of Section 4A are invoked only in the circumstances when there is a mandatory requirement of affixing of MRP on the pack. He argued that the provisions of Notification 2/2005-CE(NT) are not attracted in the facts of the case in respect of the clearances made to institutional buyers. He argued that in such circumstances Section 4A of the Central Excise Act, 1944 cannot be invoked for assessment of goods on MRP basis in respect of supplies made to institutional buyers. He pointed out that bulk packs and the containers clearly had a marking Hospital supply-no .....

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benefit of the first proviso to Section 11AC in respect of penalty imposed under Rule 25(1) of Central Excise Rules, 2002. He argued that the benefit of the said proviso cannot be extended to penalties imposed under Rule 25 of the Central Excise Rules 2002. 4. We have gone through rival submissions. We find that these products were brought into the fold of section 4A assessment by notification No. 2/2005-CE(NT) dated 07.01.2005 which reads as under: Medicaments - Assessments on basis of retail sale price (MRP) In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby specifies the goods mentioned in column (3) of the Table below and falling under Chapter or Heading No. or Sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) mentioned in the corresponding entry in column (2) of the said Table, as the goods to which the provisions of the said sub-section (2) shall apply, and allows as abatement the percentage of retail sale price mentioned in the corresponding entry in column (4) of the said Table :- TABLE S. No. Chapter or Heading No. or Sub- .....

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rmulation and the minimum pack thereof offered for retail sale, the retail price of that formulation with the words "retail price not to exceed" preceding it local taxes extra succeeding it, and the words Not under Price Control on a green strip: Provided that in the case of a container consisting of smaller saleable packs, the retail price of such smaller pack shall also be displayed on the label of each smaller pack and such price shall not be more than the prorata retail price of the main pack rounded off to the nearest paisa. A perusal of the aforesaid provisions shows that the requirement of printing the MRP is in respect of products offered for retail sale . Therefore, if the product is not offerred for retail sale, the said provision of Rule 14 & 15 will not apply. In the present facts and circumstances, we need to examine whether if the provisions of Rule 14 or 15 could be attracted. 4.1 It is seen that investigations were extended to various customers/ dealers and in para 9 of the impugned order the list of customers has been enumerated. The gist of the investigation is reproduced in para 10, 11, 12 and 13 of the impugned order. The investigations confirmed t .....

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ximum retail price (MRP) inclusive of all taxes in respect of non-scheduled formulations. 4.3.4.2. As discussed at para 4.3.4.1.1-4.3.4.1.5 hereinabove I come to the conclusion that as and when a manufacturer or distributor or importer of scheduled or non-scheduled formulations intends to sell the said formulations, he shall display, in indelible print mark, on the label of the container of the formation as well as on the minimum pack thereof offered for retail sale, the retail price or maximum retail price thereof. The argument in the impugned order being that the goods intended for ultimate sale to institutional buyers, are first sold to dealer/ distributors. Thus, when they are sold to dealers/ distributors the provision of DPCO 1995 get attracted. It is seen that the DPCO 1995 mandates, printing of retail sale price on containers as well as on minimum pack thereof offered for retail sale . From above it is apparent that what is covered in DPCO is only the items which are sold in retail. If a container is sold in retail, the container must contain retail sale price and if the content of such container are also sold in retail then each such pack sold in retail must have the MRP p .....

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