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2016 (9) TMI 319 - AUTHORITY FOR ADVANCE RULINGS

2016 (9) TMI 319 - AUTHORITY FOR ADVANCE RULINGS - TMI - Claim of exemption from SAD under Section 3(5) of the Customs Tariff Act, 1962 import of pre-packaged goods and sale thereafter - The thrust of submissions made by Revenue is that the conditions contained in Notification No. 21/2012-Cus dated 17.03.2012 are not satisfied in respect of the goods proposed to be imported by the applicant, therefore, goods cannot be exempted from additional duty of Customs (SAD) levied under Section 3 (5) of .....

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es in this case are covered by Chapter II of said Rules i.e. provisions applicable to packages intended for retail sale, the same should also satisfy all conditions regarding declarations to be made on every package, as per Rule 6 including sub-rule (e) regarding declaring the RSP of the package. As pre packaged goods to be imported would have declaration of RSP on them, this condition is also met. - Applicant is eligible to claim the benefit of exemption from payment of SAD under Notificat .....

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a subsidiary of Middleby Europe SL, Spain. Middleby Europe SL, Spain is engaged in the business of food service equipment and is known worldwide for delivering a range of high quality food service equipment. After extending its reach in various other countries, Middleby Europe has now formed the applicant as its wholly owned subsidiary. It has been set up with the aim to establish commercial refrigeration and food service products in India. Its focus is to provide international range of refriger .....

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plier will export the products in pre-packaged form to the Applicant in India. c) In the meanwhile the consumers will place their order on the applicant. Once the product reaches the applicant, it will then supply the product to the consumers on the basis of their demand. In order to start its business activities in India, the applicant now proposes to import refrigeration and food services products such as chest freezers, professional refrigeration products, refrigerated displays, ice machines, .....

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rmaceutical units etc. directly, c.) Sales to others. Applicant submits that the business model of the applicant is such that it will not be known at the time of importation whether the goods to be imported will be sold to industrial consumer, institutional consumer or retail consumer. Further, there is always a possibility that the same may be sold to the retail consumer, in which case; there will be a requirement to affix MRP under the Legal Metrology Act read with Legal Metrology (Packaged Co .....

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ed from additional duty of Customs (SAD) levied under Section 3 (5) of the Customs Tariff Act. 4. Notification No. 21/2012-Cus dated 17.03.2012 inter-alia exempts all pre-packaged goods intended for retail sale in relation to which it is required under the provisions of the Legal Metrology Act, 2009 or the rules made there-under or under any other law for the time being in force, to declare on the package thereof the retail sale price (RSP) of such article, from whole of additional duty of Custo .....

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number and State of destination, where goods are intended to be taken immediately after importation, would be declared at the time of subject import. Thus, procedural conditions would be met. Further, it is noticed from the above exemption Notification that substantive conditions include; a) pre-packaged goods b) intended for retail sale c) to declare on the package, the RSP as required under Legal Metrology Act or rules made there-under or any other law for the time being in force. Pre-packaged .....

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s the heading suggests, is with respect to Provisions applicable to packages intended for retail sale . As per Rule 3 of said Rules, provisions of this Chapter II are not to apply to - i) packages of commodities containing quantity of more than 25 kg or 25 litre excluding cement and fertilizer sold in bags up-to 50 kg; and ii) packaged commodities meant for industrial consumers or institutional consumers. 8. Since Rule 3(ii) of P C Rules uses the terms industrial consumers or institutional consu .....

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nnection with transport, hotels, hospitals or such other service institutions which buy packaged commodities directly from the manufacturer for use by that institution. 9. Revenue has brought to our notice that above referred Rule 2 (bb) and (bc) have been amended vide Notification issued from F. No. WM-9 (86) / 2014 dated 14.05.2015. Amended definition w.e.f 14.05.2015 is as under; (bb) industrial consumer means the consumer who buys packaged commodities directly from the manufacturer or from a .....

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ale (emphasis supplied). 10. It is observed that prior to 14.05.2015, industrial consumer and institutional consumer meant any consumer / institution, who bought packaged commodities directly from the manufacturer for use by that industry or institution, as the case may be. Applicant has also submitted that said PC Rules will not be applicable for industrial / institutional consumer provided packaged goods are bought by them directly from the manufacturer. In the case before us, prior to 14.05.2 .....

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e . In short, applicant would not fall under the definition of industrial / institutional consumer, as package will not be containing the declaration not for retail sale and thus, Chapter II of said Rules, 2011 regarding provisions applicable to packages intended for retail sale, would apply to subject pre-packaged goods. Declaration of RSP on packages as required under Legal Metrology act or rules made there-under etc. 11. Applicant submits that the business model of the applicant is such that .....

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