RANBAXY LABORATORIES LTD. Vs. CCE, BHOPAL

JUDGEMENT

(1.) THE dispute raised in this appeal is with regard to the valuation of medicines cleared by the appellant as "Physician Samples". The appellants, a manufacturer of P and P medicines, submitted that Physician Samples are not marketed at all and, therefore, they cannot be subject to duty of excise.In the alternative,they submitted that if duty is payable, the same should be charged based only on the cost of production of such Physician Samples and not on the basis of the sale price of the medicine.The revenue rejected these contentions and held that the duty is payable and that the value for assessment shall be the value adopted for assessment of the same medicines when sold in the market. The appellant persists with their contentions in the present appeal.

(2.) THE contention of the appellant is that physician samples are distinctly different from normal trade pack with regard to quantity in each pack, colour and size of outer cartons and design of the outer/inner carton of the pack. It is clearly written and conspicuously marked on each smallest packing that these Physician Samples are "not for sale". They have also pointed out that the Physician samples are treated distinctly by the appellants right from the stage of ordering of raw material/packing material etc. They also submit that sale of Physician Samples os strictly prohibited under the Provisions of Rule 65 and 96 among other rules of Drug and Cosmetics Rules, 1945.It is their contention in view of this that Physician Samples are not being sold and, therefore, they will not come under the category of goods. Reliance has been placed by them on the following decisions of the Apex Court in support of the submission that, being not marketable, physician samples do not quality to be treated as goods: -

(3.) IN support of their submission regarding valuation, they have contended that medicines in normal trade pack and Physician Sample packs cannot be treated as comparable goods and, therefore Provisions of Rule 6(b)(ii) of the Central Excise Valuation Rules 1975.They have accordingly canvassed for valuation of the goods at their cost of production.