- (1.) In these two sets of appeals, the Assessee is M/s. Sun Pharmaceuticals Industries Limited (SPIL). Though the issue involved is identical, as would be noted (hereinafter, the Customs, Excise and Service Tax Appellate Tribunal hereinafter referred to as 'CESTAT') has rendered conflicting decisions which is precisely the reason that one appeal is filed by the Revenue against the judgment dated 10 -11 -2006 passed by the CESTAT, West Zonal Bench, Ahmedabad, and the other appeal is filed by the Assessee -respondent which challenges the judgment dated 27 -2 -2009 passed by the same West Zone Bench, Ahmedabad of the CESTAT [2009 (245) E.L.T. 749 (Tri. -Ahmd.)]. The dispute pertains to the 'transaction value' that is to be fixed in respect of goods sold by the SPIL to its distributors as physician samples. It is not in dispute that insofar as the Assessee is concerned, it is selling these physician samples to its distributors for a price. However, since these are physician samples, the distributors in turn, supplied these samples to the physicians free of cost. Apart from above, the Assessee is also selling the goods in market which are for further sale to the ultimate consumers and are known as 'trade pack'. The price at which the goods of the later category are sold is higher than the price at which physician samples are sold. It is because of this reason that various show cause notices were issued to the Assessee, inter alia, stating that officers had found that the Assessee had manufactured trade pack as well as physician sample pack products and sold at different prices. It was alleged in the show cause notice that since these physician samples were cleared for free distribution and not sold within the meaning of Clause (a) of Sub -section (1) of Sec. 4 of the Central Excise Act, 1944 (hereinafter referred to as 'Act') (as no consideration was involved), therefore, the value was required to be maintained as per Clause (b) of Sub -section (1) of Sec. 4 of the said Act. Thus, bringing the case out of Sec. 4(1)(a) of the Act and putting it under Clause (b) thereof. A reference was made to the Central Excise Valuation Rules, 1975 (hereinafter referred to as 'Rules'). In the show cause notice, thus, provisions of Rule 6(b) of the Rules was sought to be applied and on that basis, it was proposed to have the same value at which the trade pack goods were sold. In the reply given by the Assessee, the Assessee contented that the difference in the price of trade pack and physician sample pack was due to the fact that the physician sample pack were for free distribution.
(2.) The defence of the Assessee was not accepted and the demand in the show cause notice was upheld. This order of the Assessing Authority was affirmed by the Commissioner (Appeals) as well. However, in further appeal to the CESTAT, vide its judgment dated 10 -11 -2006, CESTAT accepted the plea of the Assessee and quashed the demand raised in the show cause notice. Against this order, Revenue is in appeal for which Civil Appeal Nos. 3742 -3744 of 2007 is filed.
(3.) Same kind of show cause notice was issued for different periods wherein Assessing Officer as well as Appellate Authority confirmed the demand contained in the show cause notice. In the appeal filed by the Assessee before the CESTAT, the two members of the CESTAT gave conflicting opinion. The Technical Member, inter alia, held that since the physician samples were sold to the distributors which were meant for distribution to the physicians free of cost and that would mean that distributors did not sell the physician samples, it was not understood as to why distributors shall purchase the samples from manufacturer and then distribute the same free of cost to the physicians. According to him, a specific question was put to the counsel for the Assessee in this behalf but no satisfactory answer was given or was forthcoming from records. Giving this reason, the Technical Member took the view that price was not the sole consideration and therefore, requirement of Sec. 4(1)(a) of the Act was not fulfilled. Judicial Member took contrary view. However, the third Member has concurred with the view taken by the Technical Member on the same reason as was given by the Technical Member. Against this order, Assessee has filed Civil Appeal No. 3263 of 2009.;