30 November 2007
If the product is on MRP valuation section 4A and manufactured by you or on Loan Licensee basis then on prorata basis .Say for example, trade pack of 10 tablets is sold to distributors at Rs.20 and the physician sample contains 4 tablets the proportionate price of 4 tablets is Rs.8/- Thus, the assessable value of sample will be Rs.8/- The value, thus, is required to be determined on this basis.
In case you are paying excise duty on physician sample by determining the value by cost of production plus profit, you are requested to please workout the differential duty from 25-4-2005 till date and pay under protest. Subsequent duty should also be paid under protest as IDMA is planning to file appeal to Supreme Court against the order of Bombay High Court.
If the arrangement is jobwork and third party arrangment then on agreed price. Here even though the product is MRP based, still PS will be valued on transaction value, refer recent judgment of CESTAT in the case of Pepsico/Nestle.
CAclubindia
