1. Kopran Ltd., the assessee, was, at the relevant time, engaged in the manufacture of pharmaceutical products - ampicillin trihydrate, amoxycillin trihydrate and cloxacillin sodium. The maximum retail price fixed for these three products was specified in the Drugs (Price Control) Order, 1987. The assessee therefore declare the value for assessment of these goods for the period 1.4.1990 to 31.3.1992 at such prices that were fixed in terms of notification.
2. Notice issued to the assessee subsequently alleged that it actually recovered from its buyers for sale of the goods amount in excess of the maximum price fixed and proposed to apply actual sale price as the assessable value. It also proposed penalty on the appellant and on its two employees S.R. Petty and Sellappan, for the evasion of duty. The appeal is against the order of the Commissioner in which he confirms the liability to duty and penalty on the assessee and its two employees.
3. The common representative of the appellants contends that the assessee had on its own and on its own volition paid the duty in question much prior to issue of the notice, having come to know from an unreported decision of the Tribunal reported in the Excise Law times that what was actually paid was the value. He says however that the position has been settled by the judgment of the Supreme Court in Aluminium Industries v. CCE 1998 (99) ELT 486. In that judgment, the Supreme Court has held that in the case of goods for which retail price or maximum retail price fixed by law, applying the second clause of the proviso under Sub-section (1) of Section 4 of the Act, it is that deemed price that should be the value, not the actual price.
4. The departmental representative disputes the contention that the assessee paid duty on its own and says that what was paid was the assessable value.
5. The Supreme Court in its judgment categorically held that "what the assessee was charged in a particular case became relevant with the price of drug price control order is. If somebody has sold an article at a price than the controlled price, it cannot be taken to be the normal price." On this principle, it accepted as the assessable value of aluminium rods which were sold by the appellant before it the price stated in the Drug (Price Control) Order relating to aluminium and not the amount that was actually paid which was higher than this price.
Applying this ratio, it will have to be held that the price fixed by the Drug (Price Control) Order will the assessable value. That being the case, there has been no evasion of duty, and consequently the assessee and its employees are not liable to penalty. The question of any refund will not arise, in the light of the admission of the representative of the assessee that the incidence of duty has been passed on to the buyer.
6. The appeals are accordingly allowed and the impugned order set aside.