The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that medicament supplies to institutional buyers/government hospitals to be valued under section 4 of the Central Excise Act, 1944.
J B Chemicals & Pharmaceuticals Limited, the appellant’s concern was whether the medicaments supplied to institutional buyers like Indian Railways, Government Hospitals, and BHEL for their exclusive use are subject to assessment under Section 4 or 4A of the Central Excise Act, 1944.
Shri Yogesh B Desai, Counsel appeared on behalf of the appellant submitted that the issue has been considered in various judgments including the decision in their own case on identical facts and it was held that medicaments supplied to institutional buyers, the assessable value is not governed under Section 4A but the same is governed by Section 4 of the Central Excise Act, 1944 and duty is payable on transaction value.
A two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) observed that “since the supplies are not for retail sale but for exclusive use by the government institutes therefore since the goods are not meant for retail sale nor it is sold to retail buyers. The condition of the Revenue is that value under Section 4A of Central Excise Act, 1944 has no legs to stand”.
“There is no merit in Revenue’s allegation that such medicaments which are intended for consumption by the institutional buyers and not intended for retail sale are liable to be assessed under section 4A.”, the bench viewed.
In light of the case, M/s. USV Ltd, the Tribunal has already taken a consistent view that the Medicament Supplies to Government Hospitals and Institutional Buyers shall be valued in terms of Section 4 and not Section 4 (A). While allowing the appeal, the CESTAT set aside the impugned order
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