MERCK LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue in these appeals is valuation of physician samples of medicament cleared by the applicant and assessee under the Central Excise Act, 1944.

(2.) THE demands herein can be described to two distinct periods viz a period prior to 1.7.2000 and period subsequent to 1.7.00 to October 2002. The applicants during the subsequent period, have followed the prescribed formula for valuation of such samples as declared by the CBEC Circular No. 643/34 -02CX dated 1.7.2002 wherein the Board had clarified how valuation is to be conducted after the introduction of the changed provisions of Section 4 with effect 1.7.2000 and this position is not being contested by the Revenue. In this view of the matter, we would not find a prima facie case for placing the applicants to any deposit of duty as regards the demands after 1.7.2000.

(3.) AS regards the demands made prior to 1.7.2000, the applicants were following the pro rata formula for determining the value and discharge of duty on such samples. The case of the Revenue before us is that they should apply the costing rule of valuation and they should add the value of catch cover and other packing materials specifically procured on payment of duty and credit of such duty having been obtained and thereafter such packing materials being used for and in the physician samples. The revenue is of the view that the cost of such packing materials specifically procured for the samples has to be added for arriving at the valuation of the samples On the other hand, the Ld Advocate for the applicants submits that the costing rules formula was objected to by the Revenue and a pro rata rule was enforced and they have followed pro rata rules.