Case Law Details
Amazon Drugs Pvt Ltd Vs Commissioner of Central Excise (CESTAT Bangalore)
CESTAT Bangalore held that value of free physician samples should be done as per rule 4 of the Central Excise Valuation Rules, 2000. Valuation under rule 8 of the 2000 Rules by adding 15% profit to the cost of manufacture not acceptable.
Facts- The appellant is a manufacturer of P or P Medicines and the valuation of the goods manufactured by the appellant is undertaken with reference to the retail sale price u/s. 4A of the Central Excise Act, 1944 w.e.f. 07.01.2005.
The department noticed that during the period from 25.04.2005 to 31.03.2007 the appellant cleared the physician samples by taking the assessable value as 115% / 110% of the cost of production of such goods by applying rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 and the Board Circular dated 01.07.2002. The department believed that as per the Circular dated 25.04.2005 issued by the Board, the value of free samples should be determined under rule 4 of the 2000 Rules and, therefore, the value of the free samples has to be at par with the value of the goods u/s. 4A of the Excise Act.
Accordingly, a show cause notice dated 30.11.2007 was issued to the appellant to show cause as to why central excise duty amounting to Rs. 81, 523/- may not be demanded from the appellant under section 11A(1) of the Excise Act with interest and penalty. The Assistant Commissioner confirmed the demand of duty. Commissioner (A) upheld the same.
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