Case Law Details
Sun Pharmaceuticals Industries Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
Introduction: In a recent case before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad, a key question was addressed concerning the valuation of physician samples. The case, Sun Pharmaceuticals Industries Limited Vs Commissioner of Central Excise & ST, explored whether such valuations are governed by Section 4 or Section 4A of the Central Excise Act, 1944.
Analysis: The CESTAT ruling favored Sun Pharmaceuticals, determining that the valuation of physician samples is governed by Section 4, not Section 4A of the Central Excise Act. The Tribunal noted that physician samples, which are not intended for retail sale and are distributed free of cost to doctors, are not subject to MRP-based valuation under Section 4A.
The decision aligns with past rulings, including a Supreme Court judgment in a similar case involving Sun Pharmaceuticals. The learned Counsel for Sun Pharmaceuticals relied on several past decisions, including their own case (Sun Pharmaceutical Industries vs. CCE, Surat-II), upheld by the Supreme Court.
Conclusion: This CESTAT judgment underscores the importance of correctly classifying goods and services under the appropriate sections of the Central Excise Act, 1944. In this case, the tribunal has clarified that physician samples fall under Section 4, thereby requiring duty payment based on transaction value rather than an MRP-based value.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The issue involved in the present case is that, in respect of clearance of physician samples whether the value of such physician samples is governed by Section 4 or Section 4A of Central Excise Act, 1944.
2. Ms. Nidhi Naval, learned Counsel appearing on behalf of the appellant at the outset submits that this issue is settled in their own case reported at Sun Pharmaceutical Industries vs. CCE, Surat-II – 2005 (183) ELT 42 (Tri. Mumbai). This Tribunal decision is upheld by Hon’ble Supreme Court reported as CCE & Cus, Surat vs. Sun Pharmaceutical Industries – 2015 (326) ELT 3 (SC). She also placed reliance on the other decisions which are as follows:-
(a) Commissioner vs. Sun pharmaceutical Inds. Limited – 2017 (350) ELT A61 (SC)
(b) Commissioner of Central Excise, Vapi vs. Sun Pharmaceutical Limited – 2017 (350) ELT 289 (Tri. – Ahmd.)
(c) Commissioner of C. Ex., Thane-i vs. Meghdoot Chemicals Limited 2022 (380) ELT 531 (SC)
3. Shri Prakash Kumar Singh, learned Superintendent (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. On careful consideration of the submissions made by both the sides and perusal of the record, we find that issue lies in a narrow compass that whether the physician sample cleared by the appellant is liable to be valued under Section 4 or Section 4A, which is MRP based. The physician sample are not for retail sale and the same is distributed free of cost to the doctors and no MRP is printed on the pack of the physician sample. In such case, the value is governed by Section 4 and duty is liable to be paid on transaction value and not an MRP based value under Section 4A. This issue is no more res-integra and stand settled which is maintained upto the Hon’ble Supreme Court in the aforesaid judgment in the appellant’s own case. Therefore, the impugned order is not sustainable and the same is set-aside. The appeal is allowed.
