TMI Blog2014 (8) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... s no statutory requirement of undertaking the said activity before their import can be allowed. However, the appellant would be eligible to take cenvat credit of the CVD paid on such goods. Further, as the entire activity was undertaken with the knowledge and permission of the Customs authorities, the allegation of suppression of facts does not sustain and the duty demand is sustainable only for the normal period of limitation. Since the issue relates to interpretation of law, there is no warrant for imposition of any penalties. Thus the matter is remanded back to the adjudicating authority only for the limited purpose of re-computation of duty demand for the normal period and allowing cenvat credit of the CVD paid on the imported goods, subject to the appellant producing the necessary documentary evidence in this regard. - Decided partly in favour of assessee. - E/1830 & 1831/12, E/85419/13, E/85380 & 85381/14 - - - Dated:- 13-6-2014 - P R Chandrasekharan And Anil Choudhary, JJ. For the Appellants : Shri V S Nankani, Adv. Aqeel Sheerazi, Adv. J H Motwani Adv. For the Respondent : Shri K M Mondal, Spl. Consultant PER : P R Chandrasekharan 1. There are ni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department is of the view that the activity of affixing labels and declaring MRPs amounts to manufacture' as the products are notified under the 3 rd Schedule to the Central Excise Tariff Act and therefore, the activity of labelling and affixing MRP amounts to manufacture under Section 2 (f) (iii) of the Central Excise Act, 1944. Hence, the appellants are required to discharge excise duty liability of these goods. 6. The learned Counsel for the appellant submits that the activity of affixing labels and declaring MRP on the imported goods are mandatory vide DGFT Notification No. 44 (RE)-2000)/1997-2002 dated 24/11/2000 and these activities ought to be undertaken by every importer before effecting clearance for home consumption. Inasmuch as the activity has been undertaken before clearance for home consumption, the goods remain imported goods and there cannot be any question of manufacture' so as to attract excise levy. He further submits that there are two types of goods imported by the appellant. The majority of the goods imported by the appellant are in packages of above 10 grams or 10 ml. and in respect of these goods, counter-vailing Duty (CVD) is leviable and is di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture' as the goods are covered by the Third Schedule to the Central Excise Act, 1944. However, he fairly concedes that in respect of the goods contained in packages of above 10 grams or 10 ml. the CV duty liability has been discharged on the basis of MRP and therefore, there will be no additional duty liability on account of levy of excise duty as the MRP remains the same both before as well as after imports. However, in respect of goods in packages of 10 ml. or 10 grams or below there is no statutory requirement of labeling/affixing MRPs either under the Packaged Commodity Rules or under the Drugs and Cosmetics Rules. Since customs duty liability has been discharged on such goods on the transaction value and there is an increase in the transaction value when the goods are cleared into DTA, additional excise duty liability would accrue. It is his contention that the position will not change even after 26/02/2010, when the activities were undertaken under Customs bond and therefore, it his plea that duty demand in respect of the goods contained in packages less than 10 ml. or 10 grams would be clearly sustainable. Consequently, interest liability would accrue and penal consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f said activity. Subject: Compliance of RE-44/2000- Labelling of goods in bond prior to Ex-bond clearance - reg. It has been observed that importers have been facing difficulty in labelling commodities which are of small size and which are sensitive to heat and dust in the CFSs prior to the clearance of the same under the provisions of DFGT Notification RE 44/2000 dated 24/11/2000. The problem is further compounded due to the shortage of space in the various CFSs. 2. DGFT Notification RE 44/2000 provides for labelling of all goods imported into India which are covered by the provisions of Standards of Weights and Measures (Packaged Commodities) Rules, 1977. The compliance of this condition has to be ensured before the import consignment of such commodities is cleared by Customs for home consumption. Thus, the goods have to be suitably labeled before they are released for home consumption. 3. In view of the difficulties faced by the Importers in labeling the goods in CFSs in compliance of DGFT Notification RE44/2000, it has been decided that henceforth the importers will have the option of labelling such goods under bond. 4. The trade should asce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled. The Hon'ble Apex Court in the case of Sneh Enterprises Vs. CC, New Delhi - 2006 (202) ELT 7 (SC) once again considered the question and held as follows: Question as to when import of goods is complete would depend upon contract between the parties and/or statute governing the field. It is not a part of common law that the import of the goods would be deemed to have been completed only when it passes the customs barrier Unless there exists a statutory interdict, common law principle would apply which would mean that import would be complete when the goods enter the territories of the country Taxable event in terms of the notification issued under Section 9A of the Customs a Tariff Act, 1975 is on importation of the good and not when the same passes the customs barrier. 8.5 A plain reading of the above decisions make it clear that so long as the goods remain under the Customs control, they cannot be said to have been imported into India. In the present case both after and prior to 26/02/2010, when the appellant was undertaking the activity of labelling in the Customs bonded warehouse or in a private warehouse on execution of bond and bank guarant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CVD paid on such goods while discharging excise duty liability. Further, in the present case, we note that the appellant had declared all their activities to the Customs authorities at the time of importation and the activities have been undertaken with the knowledge and permission of the customs authorities. In this factual scenario, the appellant could not be said to have indulged in suppression of facts and hence, the invocation of extended period of time for demand of duty is clearly not sustainable in law and the duty demand would sustain only for the normal period of limitation. Since in the impugned orders, these factors have not been considered, the matter has to go back to the adjudicating authority for re-computation of the demand. Since the matter relates to interpretation of law relating to manufacture' and valuation, imposition of penalty is not at all called for. 9. To sum up, our findings and conclusions are as follows:- (1) The excise duty demand on imported goods contained in packages of above 10 grams or 10 ml. is not sustainable in law as the activity of labeling/affixing MRP is a statutory requirement before goods are allowed to be cleared ..... X X X X Extracts X X X X X X X X Extracts X X X X
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