JUDGMENT

H.L. Dattu, J.

1. A group of three appeals is filed by the appellant - Medley Pharmaceuticals Ltd., under Section 35 L (b) of the Central Excise Act, 1944 (hereinafter referred to as `the Act'). In Civil Appeal No.3626 of 2005, the appellant calls in question the correctness or otherwise of the order passed by Customs Excise and Service Tax Appellate Tribunal (CESTAT) (in short, "The Tribunal") in Appeal No. E/549 to E 551/2003-Mum, dated 3.12.2004. By the impugned order, the Tribunal has confirmed the order passed by Commissioner of Customs and Central Excise, Valsad dated 30.12.2002.

2. In this appeal, the appellant has raised the following question of law for our consideration and decision:-

"Whether Physician samples manufactured and distributed as free samples have to be assessed on the basis of cost of manufacture plus normal profits, if any, earned on the sale under Rule 6(b)(ii) of the Central Excise Valuation Rules, 1975 (for short, "Rules 1975") upto 1st July, 2000 and thereafter, on application of Rule 8 of Central Excise Valuation Rules, 2000 (for short, "Rules 2000") i.e. on cost of manufacture plus 15% profit basis and not on pro-rata basis as has been done by the Revenue?"

3. The Commissioner, while passing the order in Original No. 01/MP/Valsad/2002 dated 30.12.2002, has held that the value should be determined under Rule 4 of Rules 1975. In the appeal filed by the appellant, the Tribunal, following the judgment in the case of Mayo India Ltd. and Cheryl Laboratories (P) Ltd., held that the value of Physician samples should be determined in accordance with the principle laid down in Rule 6(b)(i) read with Rule 7 of the Rules 2000. After coming to the aforesaid conclusion, the Tribunal has accepted the method of assessable value adopted by the Commissioner, though it was under Rule 4 of the Rules 1975.

4. In Civil Appeal Nos. 1354-1355 of 2010, the appellant is aggrieved by the final order passed by the Tribunal, bearing No.A/490/WZB /AHD/2009 dated 27th February, 2009 and the order No.H/853/WZB/AHD/2009 dated 4th August, 2009 passed on the rectification application in Appeal No. E/384/2005. By the impugned order, the Tribunal dismissed the appellant's appeal and upheld the order passed by the Commissioner of Central Excise (Appeals) dated 24th November, 2004 holding that for the purpose of payment of Excise duty, Physician samples have to be valued for the period post 1st July, 2000 upto December, 2001 on pro-rata basis on the value of trade packs under Rule 4 read with Rule 11 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000. The Tribunal, while rejecting the application filed for rectification of the order dated 27th February, 2009, held that merely because a product is statutorily prohibited from being sold, would not mean that the product is not capable of being sold.

5. In this appeal, the appellant has raised the following questions of law for our consideration and decision. They are:-

(A) Whether "Physician Samples" are excisable goods in view of the fact that they are statutorily prohibited from being sold under the Drugs and Cosmetics Act, 1940 (in short, "Drugs Act") and the Rules made thereunder?

(B) If physician's samples are held to be excisable, then what is the appropriate method of valuing physician samples for the purpose of excise duty?

6. Shri S. Ganesh, learned senior counsel for the appellant, submitted that the Physician Samples of Patent and proprietory medicines come into existence as a manufactured product only when the same are labeled and packed for the purpose of sale and distribution. Our attention is invited to Note 5 of Chapter 30 of Central Excise Tariff Act, 1985, wherein it is provided that packing and labeling would amount to manufacture. Therefore, it is contended that the Physician Samples of Patent and proprietary Medicines become manufactured goods only when the same are packed and labeled.

7. It is further contended that the phy