Physician Sample not for Retail Sale, Value Governed by Section 4 of Central Excise Act and Excise Duty to be Paid on Transaction Value: CESTAT [Read Order]

The Ahmedabad Bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT), ruled that the Physician sample not for retail sale, value governed by Section 4 of the Central Excise Act, 1944 and excise duty to be paid on the transaction value.

The appellant in the present matter is Sun Pharmaceuticals Industries Limited. 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.

Nidhi Naval, Counsel appearing on behalf of the appellant at the outset submitted that this issue is settled in their own case reported at Sun Pharmaceutical Industries vs. CCE, Surat-II (Mumbai Tribunal). The Tribunal’s decision was upheld by the Supreme Court reported as CCE & Cus, Surat vs. Sun Pharmaceutical Industries.

Prakash Kumar Singh, Superintendent (AR) appearing on behalf of the Revenue reiterated the findings of the impugned order.

A Two-Judge Bench of the Tribunal comprising Ramesh Nair, Member (Judicial) and C L Mahar, Member (Technical) observed that “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 of the Central Excise Act, 1944, 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 of the Central Excise Act, 1944 and duty is liable to be paid on transaction value and not an MRP based value under Section 4A of the Central Excise Act, 1944. This issue is no more res-integra and stand settled which is maintained upto the 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 Bench concluded.

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