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2015 (9) TMI 1315 - CESTAT NEW DELHI

2015 (9) TMI 1315 - CESTAT NEW DELHI - 2015 (325) E.L.T. 185 (Tri. - Del.) - Levy of CVD on the basis of MRP - Evasion of duty by mis-declaring RSP - On enquiry it was found that appellants sold imported goods to NCCF/KB at price higher than RSP declared at time of import Demand of differential duty Imposition of penalty Held that:- sale of goods at price higher than RSP declared can only lead to conclusion that appellants mis-declared RSP of such goods at time of import Appellants are t .....

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sale of imported goods for disputed period Demand so raised is not acceptable Allegation of collection of higher price is confined to sales effected to NCCF/KB therefore, demand of differential duty, has also to be confined to sales effected to NCCF/KB only.

Admittedly appellant sold imported goods not only to NCCF/KB but to other customers also Goods sold to other customers were sold at RSP or prices lower than RSP declared In such circumstances imposition of penalty of S .....

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tion of goods and imposition of penalty on the allegation that appellants evaded duty by mis-declaring the RSP and selling the goods imported at a higher price than the RSP declared at the time of import. 2. The brief facts are that the appellants, M/S Savi Vision (P) Ltd, deals in Audio Visual Equipments such as LCD projector, Plasma TV, Home Theatre System, DVD CAMM etc. and are also dealing in import of such goods. During the disputed period from 2001 2002 to 2004 2005 the appellants imported .....

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0% value of seized goods and bank guarantee of 25%. Differential duty of ₹ 6,93,820/- was deposited. It is also alleged that on enquiry it was found that the appellants sold such imported goods to NCCF/KB at a price higher than the RSP declared at the time of import. The appellants had sold goods to retailers and other customers besides sale to NCCF/KB. A show cause notice was issued alleging mis declaration of RSP, and proposing inter alia, demand of differential duty taking into consider .....

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rest (c) demand of ₹ 1,50,88,287.05/- (CVD + EC on CVD + EC on BCD) being differential duty on past clearances along with interest (d) imposed equal amount of penalty besides penalty of ₹ 25 lakhs on Sh. Sanjeev Ratra, director of M/S SVPL under section 112 (a) of Customs Act 1962 and (e) ordered appropriation of the amount of ₹ 6,93,820/- already deposited by appellant. Aggrieved the appellants have preferred these appeals. 3. The contentions raised on behalf of the appellants .....

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e supplier of goods, packed respective consumer packings in a Master Pack. RSP was declared on these master cartons. When individual packings were removed from master packing they did not bear the MRP. iii) The goods were sold by issuing proper invoices. 80% of the sale was made to consumers other than NCCF/KB and the price collected in these sales was lower than the RSP declared at the time of import. The details of price list of these sales were furnished. That only 20% sale was made to KB and .....

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bona fide belief that the provisions of SWM Act, 1976 & PC Rules 1977 regarding display of MRP would not apply in case of sale to such institutional consumers, such sale not being to the ultimate consumer. In these circumstances, the transactions entered with Kendriya Bhandar/NCCF was for a price higher than that declared at the time of import. Further, that it is not possible for the appellants to foresee prior to import as to whom the goods will be sold after the import. v) That demand of .....

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CCF/KB was only 20% and the major supply was made by the appellant to ultimate consumers/retailers at a price lower than the RSP declared. This aspect that the appellant had made major supply below the RSP was not taken into consideration at all. The assessment of differential duty on the basis of the price list of goods sold to NCCF/ KB is wholly unjustified as the appellant has made only 20% sale of goods imported to NCCF / KB. The rest was sold at price lower than the RSP declared at the time .....

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during the above period M/S SVPL had not declared RSP on the individual packages and also had mis-declared RSP at the time of import. ii) M/S SVPL had sold the goods at higher price than the declared RSP to NCCF/Kendriya Bhandar as is evidenced by their approved pricelist. The contention of the appellants that NCCF/Kendriya Bhandar are institutional consumers and that there is no requirement to display the MRP is untenable. That SVPL has not established that NCCF/KB are not ultimate consumer . T .....

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y the MRP (RSP) at which the appellant decided to sell that particular model to ultimate consumer. These prices are to be treated as the MRP at which the particular model may be sold to ultimate consumer. It is irrelevant whether the sale is to NCCF/KB or other ultimate consumer. It is also irrelevant whether the appellant has sold items to other consumers below the RSP declared at the time of import. Therefore the adjudicating authority has rightly taken the pricelist of sale made to NCCF/KB as .....

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6/2002-CX dated 28.02.2002 was in force at the relevant time and that the appellants were under bonafide belief that the provisions of SWM Act 1976 & PC Rules 1977 was not attracted when goods are sold to NCCF/KB. Refuting the above contention of the appellant, the learned DR submitted that NCCF/KB are not institutional consumers. The sales effected to them are not outside the purview of SWM Act 1976 & PC Rules 1977. Such sale is a sale to the ultimate consumer. For a better appreciation .....

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mentalities for consumption by an individual or a group of individuals. Retail sale , in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales agencies or other instrumentalities for consumption by an individual or a group of individuals or any other consumer. Retail sale price means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer and where such price is mentioned on the package, there shall be prin .....

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to apply to packages intended for retail sale. The provisions of this Chapter shall apply to packages intended for retail sale and the expression package wherever it occurs in this Chapter shall be construed accordingly. The Explanations to section 4A of the Central Excise Act, 1944 are as under: Explanation 1 : For the purpose of this section, retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, loc .....

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e package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale prices shall be deemed to be the retail sale price; (b) where the retail sale price, declared on the package of any excisable goods at the time of its clearance from the place of manufacture, is altered to increase the retail sale price, such altered retail sale price shall be deemed to be the retail sale price; 6. It is not disputed that the goods are notified under section 4A of the Ce .....

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llant. NCCF/KB are not institutional consumers. NCCF/KB purchase goods in bulk for effecting sale to ultimate consumers and do not fall into the category of institutional consumers. Further the appellants have no case that they displayed upon the packages that the packings were for sale to institutional consumers and not for retail sale. The argument on behalf of the appellants that the appellants relied upon the Board Circular dated 28.2.2002 and was under the belief that MRP need not be affixe .....

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ntial duty. 7. The second grievance put forward is regarding the calculation of differential duty demanded. On behalf of Revenue it was urged that as a appellant sold goods to NCCF/KB at higher price, this price being the highest as established from the approved price list of NCCF/KB these prices were taken for calculation of differential duty of the goods imported during the entire disputed period. That even though the appellant sold goods to other customers at prices lower than the declared RS .....

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llants that 80% of the sale was effected to ordinary customers and the prices collected where lower than the RSP declared. That in some cases the charges collected included cost of installation articles provided extra, and also installation charges. That the authorities below ought not to have demanded differential duty on the goods sold to customers other than NCCF/KB as there is no iota of evidence that such goods were sold at a price higher than declared RSP. The ld. Counsel relied upon the d .....

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ed by the detailed list and invoices, that sales effected to customers other than NCCF/KB were made at RSP or prices lower than the RSP declared at the time of import. In such circumstances we have to agree with the appellant s contention that the demand of differential duty on goods sold below RSP or goods sold at RSP is unjustified. Merely because the importer effected sale of some goods at price higher than the RSP declared, the Revenue cannot demand differential duty on entire import done as .....

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e retail sale price in respect of each packet. 11. Explanation 2 to Section 4A is to the effect that where more than one retail price is declared on the packet, the maximum of such retail price shall be deemed to be the retail price for the purpose of the Section. In the instant case, Revenue has no case that different MRP was affixed on same packages. So also it is not denied that the appellants sold goods to customers other than NCCF/KB at rates lower than the RSP declared at the time of impor .....

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rbid sale of goods at prices lower than the declared RSP or equal to RSP. On such score, there cannot be any mis-declaration of RSP if goods are sold at RSP or below RSP. Undeniably the allegation of collection of higher price is confined to the sales effected to NCCF/KB. The demand of differential duty, in our view, has also to be confined to sales effected to NCCF/KB only. In such circumstances the demand of differential duty of ₹ 1,50,88,287.05 on entire sales is unsustainable. Accordin .....

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id not bear the MRP is that, at the time of import when more than one piece of the same item is imported, the supplier packed them in a master carton. MRP was declared on the master carton. When the individual packings were removed from the master carton they did not have the MRP declaration. We do not find this as a plausible explanation. As per the relevant provision of SWM Act 1976 and PC Rules 1977 the packages ought to have the MRP declared on them. Therefore, we hold that the confiscation .....

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for appellant argued that Shri Sanjeev Ratra was only an employee of the company and was under the bonafied belief that as per the Board Circular dated 28.8.2002 the provisions of SWM Act, 1976 and PC Rules 1977 were not applicable for the sales made to NCCF/KB. That at the time of import the appellant could not for see to whom the goods would be sold. These submissions are not without merits. The appellant sold the imported goods not only to NCCF/KB but to other customers also. The goods sold .....

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