Case Law Details
Elvina Pharmaceuticals Ltd. Vs Commissioner of Central Excise (CESTAT Bangalore)
Introduction: The case of Elvina Pharmaceuticals Ltd. vs. Commissioner of Central Excise (CESTAT Bangalore) revolves around the valuation of physician samples under the Central Excise Act. The appeal challenges the order dated 17.3.2011, wherein demands for a differential duty of Rs. 7,33,036/- were confirmed for the period from October 2007 to May 2008. The appellants, manufacturers of P & P Medicines, cleared physician samples by discharging duty at 110% of the cost of production, a method contested by the Revenue.
Detailed Analysis: The core contention revolves around the correct method of valuation for physician samples. The Revenue, citing the recent judgment of the Tribunal in the case of M/s. Amazon Drugs Pvt. Ltd. vs. CCE, Bangalore, argues that valuation must be done under Section 4 of the Central Excise Act, 1944, read with Rule 4 of the Central Excise (Valuation) Rules, 2000. The Tribunal, relying on the Larger Bench’s decision in Cadila Pharmaceuticals Ltd. vs. Commr. of C.Ex. Ahmedabad-II and the Supreme Court’s ruling in Medley Pharmaceuticals Ltd. vs. Commr. of C. Ex. & Cus., Daman, held that the physician samples should be valued on a pro-rata basis.
The Tribunal further emphasized that the valuation method under Rule 8 of the Central Excise (Valuation) Rules, 2000, as adopted by the appellants, is contrary to the law laid down by the Supreme Court. The judgment of the Supreme Court in Medley Pharmaceuticals case, supporting the pro-rata valuation of physician samples, has been reiterated by the Tribunal in the present case, following its earlier decision in Amazon Drugs Pvt. Ltd.
Conclusion: In conclusion, the Tribunal upheld the order, dismissing the appeal on the grounds of merit. The decision reinforces the principle that the valuation of physician samples for the purpose of excise duty must be in accordance with Rule 4 of the Central Excise (Valuation) Rules, 2000, as interpreted by the Supreme Court. This case sets a precedent and clarifies the correct method of valuation for similar disputes, providing clarity for pharmaceutical manufacturers and ensuring compliance with excise duty regulations.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
