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Commissioner of Customs (Import) , Nhava Sheva Versus M/s Sleek International

2015 (10) TMI 32 - CESTAT MUMBAI

Levy of CVD on MRP basis - Determination of correct RSP - Confiscation of goods - whether the goods cleared in the past under Bills of Entry as detailed in Annexure 1 to the show cause notice need re-determination of RSP and their leviability to confiscation - Enhancement of penalty - Held that:- Goods are imported in package form and leviable to duty on RSP based assessment as stickers of higher MRP were found affixed on seized goods in the godowns. For not declaring the MRP correctly, the good .....

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usly states that in the case of such goods, the retail sale price has to be declared on the package as required under the Standards of Weights and Measures Act (SWM). The retail sale price is required to be declared in the case of imported goods which are specified under Section 4(A)(1) of the Central Excise Act. And the retail price which the respondent was required to declare on the goods packages is the maximum price at which they may be sold to the ultimate consumer and which is termed as ma .....

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the retail sale price of the package. In the case of goods seized from the container as well as goods found in the godown, "the respondent have violated the provisions of the SWM(PC) Rules read with Section 3(2) of the CTA requiring importer to affix the label at the time of import. As those labels were not affixed as well as fact that RSP was not declared on the goods makes the goods liable to confiscation under Section 111(d) of the Customs Act and leviable to duty on MRP basis. - Retail .....

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e the facts are different. Here the MRP was wrongly declared in the Bill of Entry. After clearance form Customs, the appellants sold the goods at prices which are different from the MRP declared by them. - even if there are no machinery provisions laid down in Section 3(2) of the CTA and Section 4A(4) of the Central Excise Act, it cannot be concluded that Section 3(2) of the Customs Tariff Act will become ineffective and the law rendered otiose. - Decided in favour of Revenue. - Appeal No. C/869 .....

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and Preventive wing on 5th June 2010 intercepted a container at Uran Phata, Junction, cleared from Customs at JNPT under B/E 662557 dt 28.05.2010 and on the way to Vashi. On examination, it was found that there was huge difference between MRP/RSP of the goods, namely Sanitary ware of Iron and Steel, declared in the Bill of Entry and the MRP declared on the price list obtained at their store at Vashi. The partner of the respondent in his statement on 7 th June 2010 confessed that normally the sup .....

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ntial duty of ₹ 1,49,754/- and ₹ 1,53,148/- on the goods which were cleared under the Bills of entry dated 28/5/2010 and B/E 813289 dt 18/12/2009. The goods in the container were seized. Equal quantity of packaging cartons provided with product code found in the containers were also seized. In further action the goods valued at ₹ 10310919/- lying in their godown at Vasai were seized for non declaration of MRP. The goods consisted of Hobbes, Ovens and Sinks. In the godown, print .....

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re duty was demanded in respect of such good which were cleared from customs allegedly by declaring lower MRP. The adjudicating authority confiscated the goods cleared, under Section 111(m) of the Customs Act with an option to redeem the same under Section 125 on payment of fine of ₹ 5 lakhs. Further, by rejecting the declared RSP and ordering the re-determining of RSP as ₹ 4,35,05,088 he confirmed the demand of duty of ₹ 15,33,382/- on the goods cleared in the past. He also co .....

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1 lakh. Further he reduced demand on the goods cleared in the past to ₹ 9,44,404/- for the reason that the Rules for determination of RSP were introduced by notification No. 13/2008 dt 1/3/2008 (sic) and such determination can be done only after 1/3/3008 (sic). Accordingly, he confirmed penalty of ₹ 9,44,404/- under Section 114(A). He upheld the penalty of ₹ 1 lakh on the partner. 3. Heard both sides. 4. Revenue's appeal is mainly on two grounds. The first is that in terms .....

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he documents was known to the importer. Correspondingly the equivalent penalty under Section 114A of ₹ 15,33,382/- is imposable. The second ground of appeal is that the Commissioner ignored the fact that the importer did not put RSP labels on the pre-packed commodities in terms of Notification No. 44/RE-2000/1997-2002 dated 24/11/2000 issued by DGFT read with Section 46 of the Customs Act making the goods seized in the godown liable to confiscation. 5. The respondent filed cross objection .....

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t liable for confiscation. (c) Only those goods were seized which did not bear MRP labels at the time of import but no investigation was done to establish that these goods were imported under the 21 Bills of Entry, therefore the Commissioner (Appeals) held that these are not liable for confiscation. (d) The goods are not liable for confiscation under Section 111(d) having already been cleared for home consumption to become imported goods. (e) for import before 1/3/2008 there was no provision for .....

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der two Bills of Entry were sold at the declaration of RSP and not as per price list. Therefore differential duty of ₹ 149754/- and 153148/- is not payable nor the goods are liable to confiscation. (i) The Adjudicating authority and the Commissioner (Appeals) gave finding that there is no proof whether the RSP labels were pasted on the goods cleared in the past and there is no evidence to show that the goods seized were the same as covered by the 21 Bills of Entry. The Commissioner has enh .....

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etermination of RSP and their leviability to confiscation. Third aspect is whether the Commissioner (Appeals) could have enhanced the penalty imposed under Section 114A without giving notice the respondent. 7.1 On the first issue, Revenue's stand that the goods are sold after affixing MRP on the packages, is contested. We find that the goods were being taken in the container and the packages were stacked on the pallets model wise and equal number of packing cartons printed with importer' .....

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ondent. Investigation also showed that the price list, MRP stickers, sale invoices showed higher price than the MRP declared to customs at the time of import. IT was also revealed by Shri. D. Mohan Reddy, Godown Incharge that the MRP is provided on the cartons with rubber stamp at the time of dispatch as per the price list received from their head office. This fact also comes down in the panchanama when samples of cartons were drawn. These facts are clearly reflected on the samples of goods draw .....

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makes no material difference because the MRP declared in the price list and the stickers is higher and the partner admitted at the time of import that they are selling the goods at the list price. The proviso to Section 3(2) of Customs Tariff Act unambiguously states that in the case of such goods, the retail sale price has to be declared on the package as required under the Standards of Weights and Measures Act (SWM). The retail sale price is required to be declared in the case of imported goo .....

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with sticker generated on the printer machine which was also seized under the Panachanama on 9 th Jun 2010. The same facts were also admitted by the partner Shri. Rajesh Ahuja, Manager marketing, for the respondent who submitted copies of the stickers in respect of various models. It is also seen from the records that some goods were lying packed condition in the godown with sticker affixed on them. Investigation also showed that the price list, MRP stickers, sale invoices showed higher price th .....

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erefore both the conditions specified in proviso to Section 3(2) of the CTA are met and goods will be leviable to RSP based assessment. Rule 6(1) of the SWM(PC) Rules, states that (i) Every package shall bear their own owned label securely affixed thereto defined plain and conspicuous declaration made in accordance with the provisions of this Chapter as to (a) name and address of the manufacturer (f) the retail sale price of the package. In the case of goods seized from the container as well as .....

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ed from the godown were the same as those covered by the remaining bills of Entry mentioned in Annexure (1) to the show cause notice is not acceptable because modus operandi followed is confirmed by the statements of various people as mentioned above. It has been confessed by the partner that they bring all the goods to their godown at Vashi. No evidence has been provided to show that the goods lying in the godown are not imported goods or did not relate to the goods imported under Bills of Entr .....

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ble to duty on actual MRP basis. The plea that adjudicating authority did not confiscate goods under Section 111(d) and the same was not challenged before the Commissioner (Appeals) does not mean that the department is precluded from invoking the correct provisions of law. 7.5 The third issue contended is that enhancement of penalty from ₹ 2 lakhs was not a matter before the Commissioner (Appeals). We find that Section 114A mandates that the penalty leviable in cases where duty has been de .....

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(2) states that "provided that in case of an article imported into India, - a) in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law for the time beingin force, to declare on the package thereof the retail sale price of such articles; and (b) where the like article produced or manufactured in India, or in case where such like article is not so produced or manufactured, the .....

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s. The proviso to Section 3(2) of Customs Tariff Act unambiguously states that in the case of such goods, the retail sale price has to be declared on the package as required under the Standards of Weights and Measures Act, (SWM) The critical words are "required" and "declared" . There is not an iota of doubt that the retail sale price is required to be declared in the case of imported goods which are specified under Section 4(A) (1) of the Central Excise Act. The question whi .....

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eared by paying CVD in terms of Section 4 of the Central Excise Act, 1944 by misclassifying the goods. In the present case the facts are different. Here the MRP was wrongly declared in the Bill of Entry. After clearance form Customs, the appellants sold the goods at prices which are different from the MRP declared by them. The case of Revenue is that the MRP was wrongly declared. It is our considered view that even if there are no machinery provisions laid down in Section 3(2) of the CTA and Sec .....

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