TMI Blog2018 (4) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... act it was held that there is no sale involve, hence the CVD cannot be charged on the basis of RSP/MRP in terms of Section 4A of the Central Excise Act, 1944. CVD cannot be charged - appeal allowed - decided in favor of appellant. - C/1045/2009 - A/85767/2018 - Dated:- 21-3-2018 - SHRI RAMESH NAIR, MEMBER (JUDICIAL) AND SHRI RAJU, MEMBER (TECHNICAL) Appearance: Shri T. Viswanathan, Advocate for Appellant Shri S.R. Nair, Examiner (AR) for Respondent Per: Ramesh Nair The issue involved in the present case is that whether the imported Digital Video Projectors and Decoders given on lease to the Theater Owners for using in display of the movie is liable for CVD on the basis of valuation under Section 4A of the Central Excise Act, 1944. 2. The fact of the case is that the appellant M/s UFO Movies India Ltd. imported Digital Video Set and given on lease to the Theater owners for which the lease rent is collected. The case of the department is that the leasing of projector is amount to sale in terms of Standards of Weights and Measures Act, 1976. Accordingly, they are required to declare the RSP on the package of the imported article and consequently the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sale in the Legal Metrology (Packaged Commodities) Act (earlier Standards of Weights and Measures Act, 1976) has been considered. Therefore, the argument made by the learned AR is of no use as the entire argument made by him has been already considered by this Tribunal in the case of Bharti Telemedia Ltd. (supra). The relevant portion of this Tribunal s decision in Bharti Telemedia Ltd. (supra) is reproduced below: - 6. We have carefully considered the submissions made by both sides. 7. The issue is to be examined with reference to the legal provisions. The countervailing duty i.e. CVD, as it is commonly referred to, is levied under Section 3(2) of the Customs Tariff Act, 1975. The dispute centers around the proviso to Section 3(2) which 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 Legal Metrology Act, 2009 (1 of 2010) or the rules made thereunder or under any other law for the time being in 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not include industrial or institutional consumers; (l) retail sale , in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales shops, agencies or other instrumentalities for consumption by an individual or a group of individuals or any other consumer; (m) retail sale price means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer and the price shall be printed on the package in the manner given below : Maximum or Max. retail price Rs ./- Rs .... inclusive of all taxes or in the form MRP Rs ... /- Rs ... incl., of all taxes after taking into account the fraction of less than fifty paise to be rounded off to the preceding rupees and fraction of above 50 paise and up to 95 paise to the rounded off to fifty paise; The retail sale price is defined above as the maximum price at which retail package may be sold. And retail package means packages which are intended for retail sale to the ultimate consumer. In other words the retail price will be required to be declared on the package only if it is intended for retail sale. The ld. Counsels have contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case before us is the definition stated in the Legal Metrology Act. 7.1 This leads us to examine the facts with reference to that part of definition of sale which requires that there should be transfer of property. That is, whether on the basis of evidence it can be established that there is transfer of property in the transactions between the appellant and the ultimate subscriber of DTH Service. The appellants have put forth various pieces of evidence in this regard. They have referred to the agreements with their service provider, distributor as well as with the ultimate consumers. None of the agreements speak of transfer of property of STBs. They have also referred to the declaration on the subscriber application form (SAF) filled by the subscriber which clearly indicates that the title to the goods, namely STBs, remains with the appellants. The ld. AR argued that while signing the SAF, the subscriber doesn t put a remark against any of the options i.e. the options of sale or hire-purchase or rental. According to him such a contract involving the transactions becomes void in terms of the Indian Contract Act as the consumer is not aware of what he has agreed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e device into the service charges that are imposed, cannot be accepted as a finding of fact without there being an adjudication in this regard. 7.3 Revenue has adduced no evidence whatsoever to show that the cost of STBs is being passed on as service charges. In the absence of any credible evidence, we reject the contention of Revenue that the appellants have devised a way to build the cost of the STBs into the service charges. We find the case at hand quite similar to the transactions of SIM Cards for Cellular Phones. The Hon ble Supreme Court in the case of Idea Mobile Communication Ltd. (supra) held that The position in law is therefore clear that the amount received by the cellular telephone company from its subscribers towards SIM Card will form part of the taxable value for levy of service tax, for the SIM Cards are never sold as goods independent from services provided. They are considered part and parcel of the services provided and the dominant position of the transaction is to provide services and not to sell the material i.e. SIM Cards which on its own but without the service would hardly have any value at all. Thus, it is established from the records and facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to in Section 3(2) of the Customs Act. It is under these Acts that we have to determine whether RSP based assessment is warranted or not. Therefore on this point Revenue has no case. 9.1 Another argument put forth by Revenue is that because the transaction between the service provider and the customer has a warranty clause, therefore it can be said that the goods have been sold and the property does not remain with the service provider. This argument does not appeal to us because warranty is normally provided in the delivery of services too and not in the delivery of goods alone. And in the present case what is provided is delivery of service. The allegation by Revenue that the cost of STBs is recovered through service charges is belied by the fact that the duty paid in terms of Section 4 of the Central Excise Act would be more than the duty payable under Section 4A considering that, in the latter case, refund of SAD would be admissible. The counsels submitted calculation charts to evidence this point and Revenue does not counter the same. 9.2 The ld. Counsel for Bharti Telemedia also contended that there is no mechanism for determining duty under Section 4A if M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odity in packaged form may be sold to the ultimate consumer. Thus, the definition of sale in Section 2(v) of the SWM Act becomes relevant. Therefore, unless there is an element of sale, as contemplated in Section 2(v), Rule 6(1)(f) will not be attracted and thus such package would not be governed under the provisions of SWM(PC) Rules which would clearly take such package out of the restricted arena of Section 4A(1) of the Act and would put it in the broader arena of Section 4 of the Act. Rule 6(1)(f) which is now Rule 6(1)(e), requires every package to bear the retail sale price. Applying the ratio of the above judgment we see in the present case also, as there is no sale involved, Rule 6(1)(e) is not attracted. Therefore the imported packages would not be governed by the provisions of LMA (PC Rules) and would not be assessable to duty on RSP basis. 10.2 Ld. AR has not appreciated the Hon ble Supreme Court judgment above in its proper perspective. In the said judgment it was held that : We are not in a position to accept the arguments of learned Counsel that merely because there is a bulk sale to DoT, MTNL and BSNL, the assessment should be under Section 4 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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