Excise Duty Payable Under Section 4(i)(a) on Pro Rata Value of Physician Samples Sold to Distributor

Sun Pharmaceuticals Industries Limited Vs C.C.E. & S.T.-Vadodara-ii (CESTAT Ahmedabad)

Introduction: The Central Excise and Service Tax Appellate Tribunal (CESTAT) Ahmedabad recently addressed a significant issue regarding the liability to pay excise duty on the valuation of physician samples of medicaments sold to dealers for free distribution to doctors. This case involves Sun Pharmaceuticals Industries Limited vs. C.C.E. & S.T.-Vadodara-ii and has far-reaching implications. In this article, we provide a detailed analysis of the case and its outcome.

The Central Issue

The primary question in this case revolves around whether the appellant is obligated to pay excise duty on the valuation under Section 4A concerning physician samples of medicaments. These samples are sold to dealers with the intention of free distribution to doctors, and they are explicitly labeled as “not for sale.” The key issue is whether the valuation should be governed by Section 4 or Section 4A of the Central Excise Act, 1944.

Appellant’s Argument

Please become a Premium member. If you are already a Premium member, login here to access the full content.