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M/s. Mathewsons Exports & Imports (P) Ltd. Versus Commissioner of Customs, Cochin

2016 (10) TMI 333 - CESTAT BANGALORE

Mis-declaration of MRP at the time of import - demand of differential duty - import of toilet soaps - declared RSP per piece ₹ 5/- replacement of the labels/stickers - Held that: - there has been a clear facilitation and association with the activities of post-import sale of the goods at higher prices by affixing higher price (MRP) labels on the goods on the part of the appellant-importer. The importer has been in active knowledge and they rather facilitated the sale of the goods to be mad .....

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annot cut much ice, when they themselves have through out been involved and in the full active knowledge of the fact that the goods were being sold at the higher price (MRP) than what they had declared to the customs. - The decision in the case of PLANET SPORTS PVT. LTD. Versus COMMISSIONER OF CUSTOMS, NEW DELHI [2004 (10) TMI 209 - CESTAT, NEW DELHI] relied upon where it was held that it was incumbent upon the importer to declare the MRP at which the imported goods were to be sold and not a .....

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s. Mathewsons Exports & Imports (P) Ltd. are in appeal against the Order-in-Original dated 30.5.2006 passed by Commissioner of Customs, Cochin whereunder demand for differential duty of ₹ 34,86,064/- was confirmed against the appellants on account of enhancement made in the value of the goods imported. 2. The appellant has been represented by the learned advocate, Shri P. Gopinatha Menon and Revenue has been represented by the learned AR, Shri J. Harish. 3. The learned advocate based o .....

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the wholesale dealers, subsequent to the clearance of the goods from customs. (iii) The Department s case is that the MRP has been increased at the hands of the wholesale dealers and sold at a higher price thereby causing short payment of CVD. If that be so, the wholesale dealer will become a deemed manufacturer going by Section 2(f)(iii) of Central Excise Act and it is those dealers who affixed the revised MRP, who will become liable to pay Central Excise duty at the enhanced MRP. (iv) The cha .....

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ed 09.02.2004. It was appellant who informed the customs regarding the non-fixture of MRP stickers on 1605 cartons. The whole investigation and the consequent differential CVD demand is the result of the information given by the appellant. In such case, the appellant cannot be fixed with any culpability as to wilful suppression, fraud, etc. (vii) The Department does not have a case that the appellant sold the imported goods to the marketing agency at a price higher than the MRP declared before t .....

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1997 (92) E.L.T. 309 (S.C.) e. I.T.C. Ltd. vs. CCE, New Delhi : 2004 (171) E.L.T. 433 (S.C.) 4. On behalf of Revenue, learned AR, Shri J. Harish has reiterated the findings given by the lower Revenue authorities. He further inter alia submits as under: i. Whole operation of the appellant in this case is that there has been facilitation and involvement of the appellant in avoiding payment of right duty/taxes to the Revenue. The contents of show-cause notice and the Order-in-Original indicate tha .....

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vading payment of right duties (CVD). iv. The learned AR in support relies on the following decisions of the CESTAT, Delhi. a. Planet sports Pvt. Ltd. vs. CC, New Delhi: 2005 (180) E.L.T. 206 (Tri.-Del.) b. Media Industries Ltd. vs. CC, Mumbai: 2006 (199) E.L.T. 345 (Tri.-Del.) 5. We have carefully considered facts of the case on record, the submissions made by both the sides and the case laws cited. 6. The appellant has been importing toilet soaps where they had declared the RSP per piece as &# .....

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ery, packing, forwarding and the like and the price is the sole consideration for such sale. The Countervailing Duty (CVD) have been assessed on basis of Maximum Retail Price/Retail Sale Price (MRP/RSP) declared before the Customs after abatement as permitted under Section 4A of the Central Excise Act, 1994 and under Notification No.5/2001-C.E. (NT) dated 01.03.2001 superseded by Notification No.13/2002-C.E. (N.T) dated 1.3.2002 as amended from time to time. In the case of toilet soaps the abate .....

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Department of Commerce Notification No.44 (RE-2000)/1997-2002 dated 24.11.2000 and Public Notice No.3 & 4 of 2001 issued by Commissioner of Customs, Custom House, Cochin. Investigations have revealed that the MRP has been mis-declared by the importer, by M/s. Mathewsons Exports & Imports Pvt. Ltd. in their Bills of Entry at the time of presentation . 6.1 Further the show-cause notice dated 11.7.2005 in its para 2 to 5 states as follows: 02. The Government of India vide Ministry of Comme .....

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of the commodity packed. c. Net quantity in terms of standard units of weights and measures. If the net quantity on the imported package is given in any other unit, its equivalent in terms of standard units shall be declared by the importer. d. Month and year of packing in which the commodity is manufactured or packed or imported. e. Maximum Retail Sale Price (MRP) at which the commodity in packaged form may be sold to the ultimate consumer. This price shall include all taxes local or otherwise .....

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as these are applicable on similar domestically manufactured products. 04. As per the DGFT Notification No.44 (RE) dated 24.11.2000, an importer of consumer products has to ensure the strict compliance of the conditions laid down by the DGFT on all import of pre-packaged products. It is based on this MRP that the CVD component of import is calculated. 05. It has been clearly laid down in the proviso to Section 3(2) of the Customs Tariff Act, 1975 that, in case of an article imported into India i .....

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l Gazette allow in respect of such like article under sub-section (2) of Section 4A of the Central Excise Act, 1944 . 6.2 From the facts and the evidences available on record, we find that the appellant viz., Mathewsons Exports and Imports (P) Ltd. in association with the distributor(s) replaces the stickers/labels where as per the requirement of the relevant laws Maximum Retail Price (MRP)/Retail Sale Price (RSP) has to be declared. MRP/RSP is the price, which is the maximum price fixed under l .....

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buyers. The MRP declared to the customs for imports made during different periods has certainly been lower than the MRP fixed/charged from ultimate buyers by putting different labels. The appellant generally declared the MRP as ₹ 5/- for his imports whereas the actual MRP meant for final consumer has been in the range of ₹ 10/- and above. Either there were no MRP labels affixed or these labels were replaced later with higher MRP labels by the appellant in association with his distrib .....

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1 The act of the appellant pointing out to the customs about non-fixing of MRP stickers cannot diminish the responsibility of the importer appellant, when the said goods were later found to be with the MRP stickers having a higher retail price, which was certainly way above the price declared to the customs. 6.3.2 We find that there has been a clear facilitation and association with the activities of post-import sale of the goods at higher prices by affixing higher price (MRP) labels on the good .....

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the Commissioner s findings clearly indicate that the appellant cannot absolve themselves from the responsibility that the goods carried different MRP labels of the price then what they had declared to the customs. The Commissioner s observations in the impugned order given in its paragraphs 50 and 54 are given below: 50. Statements of the importer as well as the distributors were recorded by the investigating officers. The importer stated that the soaps imported by them carried MRP stickers of .....

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e sale made at a higher price by one of his distributors. The fact that the soaps had been sold at a higher MRP as stated by the importer in his statement, has been further corroborated by the sales invoices and letters submitted by M/s. Supply Co. in this regard. The distributors in the supply chain from the importer to the ultimate consumer, namely M/s. Aishwarya Trade Links and M/s. Plus One Agencies have also admitted that the MRP of the soaps at their end was ₹ 10/- during the period .....

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Agencies, stated that they were the only dealers for the GIV and Harmony Brands of soaps imported by M/s. Mathewsons Exports & Imports and that their major distributors were M/s. Plus One Agencies at Ernakulam, M/s. Kalattil Agencies, Trivandrum and M/s. Priya Automobiles, Calicut. He further stated that he was not aware of the MRP of ₹ 5/- declared by the importer before Customs and had not noticed the MRP of ₹ 5/- on the soaps. He also stated that his selling price was ₹ .....

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nnot cut much ice, when they themselves have through out been involved and in the full active knowledge of the fact that the goods were being sold at the higher price (MRP) than what they had declared to the customs. 6.4.1 We again agree with the findings of the Commissioner in para 57, where he observes as under: 57. I find from the records that the investigation had ascertained that the GIV and Harmony Brands of soaps imported by M/s. Mathewsons Exports & Imports were being sold at a highe .....

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ated by the recovery stickers during the investigation. Further, everyone has agreed to the fact that they have been selling the imported soaps at a price higher than the MRP of ₹ 5/- declared by the importer. Shri Beby Mathew, Managing Director of the importing firm has admitted to the fact that he was aware of the fact that the selling price of M/s. Mathewsons Agencies was ₹ 6.70, in spite of which he did nothing and continued to declare the same MRP before Customs. Though there ha .....

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onclude that the soaps imported by M/s. Mathewsons Exports & Imports had indeed been sold in the market at a higher MRP than that declared before Customs at the time of import. I also conclude that the MRP as detailed in the table annexed to the show cause notice for the respective periods is the actual MRP at which sale was made during the periods mentioned therein. 6.5 Considering above discussions, we are of the considered view that the appellant is liable for payment of differential duty .....

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on goods imported equal to the excise duty for the time being leviable on a like article if manufactured in India. Sub-section (1) further provides that if excise duty on a like article is leviable at any percentage of its value, the additional duty shall be calculated at that percentage of the value of the imported article. Sub-section (2) of Section 3 of the Customs Tariff Act contains provisions for the determination of assessable value. Proviso to sub-section (2) provides that in case of an .....

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which are not in dispute are that the impugned goods are the goods in relation to which the retail sale price is to be declared on the packages under the law for the time being in force and these goods have been specified by the Central Government under Section 4A(1) of the Central Excise Act. It is also not disputed by the Appellants that the MRP declared by them at the time of importation was not the same at which the goods were sold by them subsequently. This fact has been admitted by Shri Di .....

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t. In MRF case, the assessee had cleared the excisable goods on the basis of declared prices which were sold subsequently at a lesser price on the direction of the Government. The refund claim filed by them was rejected by the Department which had been upheld by the Supreme Court holding that once the assessee has cleared the goods on the classification and price indicated by him at the time of the removal of the goods from the factory gate, the assessee becomes liable to payment of duty on that .....

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ufactured by them after paying excise duty on the basis of the Maximum Retail Price printed by them on each cigarette packet. In the present matter the Appellants have changed the MRP. We, therefore, hold that there was a misdeclaration of MRP at the time of import and as such we uphold the demand of duty, liability of the impugned goods for confiscation and liability of the Appellants for penal action. We uphold the demand of differential duty. 6.5.1 Further, we refer to the observations made b .....

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