(a) CCE, Mumbai-I Vs. Charak Pharmaceuticals - 2001 (127) ELT 748 (Tri.-Mum.)

(b) Cheryl Laboratories (P) Ltd. Vs. CCE, Hyderabad - 1997 (19) RLT 501 (CEGAT-SB)=1997 (93) ELT 129 (Tribunal)

In the Cheryl Laboratories case, the CEGAT has further held that for valuation of physician's free samples, no adjustment is called for on account of physician's samples being supplied free of cost and also profit motive has no bearing on the valuation under Rule 6 (b) (i) of the Valuation Rules, 1975.

4. Shri L. Narasimha Murthy, the learned SDR represented the Revenue and Shri K. Krishnan Kutty, the learned Consultant appeared for the Respondent.

5. The learned Consultant urged the following points:

(i) The physician's samples and the products cleared for wholesale trade are similar only in quality. In all other respects including packing, printing, labeling, etc., the goods are not comparable.

(ii) In respect of physician's free samples, there is no wholesale packer.

(iii) Rule 6 (b) (i) can be applied only when excisable goods are consumed by the assessee or on his behalf in the production/ manufacture of other articles.

(iv) While applying provision of Rule 6 (b) (i), the proper officer has to extend necessary adjustment in the value of comparable goods, which the learned Adjudicating Authority rejected. Hence, the only course left is to adopt Rule 6 (b) (ii). Therefore, the OIA is correct and need not be interfered with.

(v) The Supreme Court, in the case of CCE, Meerut Vs. Universal Glass Ltd. - 2005 (67) RLT 351 (SC)=2005 (182) ELT 3 (SC), has held that comparable goods under Rule 6 (b) of CE Valuation Rules, 1975 should be, as far as possible identical goods. Simply because two goods are known by the same name or by the same genre does not mean that they are comparable goods. Even if they are assumed to be comparable, all relevant differences as far as possible should be recognized.

(vi) The Tribunal, Mumbai, in the case of Sun Pharmaceutical Industries Vs. CCE, Surat-11 - 2005 (183) ELT 42 (Tri.-Mumbai), has held that the value of physician's free samples in smaller pack cannot be compared with bigger packs and value of free samples in smaller pack cannot be increased pro rata to price of commercial pack.

6. We have gone through the records of the case carefully. The point at issue is the method to be followed in valuation of physician's samples. Rule 6 (b) (i) is the method of valuation on the basis of the price of comparable goods. The Commissioner (Appeals) has given 3 reasons for holding that