Medicament Supplies to Government Hospitals and Institutional Buyers are to be valued u/s 4 of Central Excise Act: CESTAT [Read Order]

A Division Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench held that Medicament Supplies to Government Hospitals and Institutional Buyers are to be valued under Section 4 of Central Excise Act. The appellant in the present appeal is J B Chemicals & Pharmaceuticals Ltd.

The issue involved in the present case is that whether the supply of medicaments to Government Institutions such as BHEL, Railway, Government Hospitals, etc. wherein, on the package it is mentioned ‘NOT FOR SALE’ and no retail price was printed is liable to be governed by Valuation Provision of Section 4 or Section 4A of the Central Excise Act, 1944.

Yogesh B. Desai, Counsel appearing on behalf of the appellants at the outset submits that on the identical facts and the issue involved, this tribunal has passed various decisions wherein, it was held that when supply was made to institutions such as railways, government hospitals, etc. and on the package, it is mentioned as ‘NOT FOR SALE’ and retail price was not printed, the valuation of the goods shall be governed by Section 4 and not Section 4A of the Central Excise Act.

The fact is not under dispute that the medicaments have been supplied by the appellant to institutions such as BHEL, Railways and other government hospitals and on the package of the goods it is stated as ‘NOT FOR SALE’ and no MRP was printed.

The Coram of Ramesh Nair, Judicial Member and Raju, Technical Member relied on the judgment in Medley Pharmaceuticals Ltd wherein it was held that “Medicament Supplies to Government Hospitals and Institutional Buyers shall be valued in terms of Section 4 and not Section 4 (A).”

“The issue is no longer res-integra and in the appellant’s case value of goods is clearly governed by Section 4 of Central Excise Act and not under Section 4A therefore, the impugned order is not sustainable hence the same is set aside” the Tribunal noted.

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