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TMI Blog2021 (10) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... t so imported was in 50 kgs packages with the MRP affixed on the packs as Rs. 190/-. The importer claimed Special Additional Duty (SAD) exemption under Sl. No. 1 of Notification No. 29/2010-Cus. dated 27.02.2010. The above Notification reads as under: "[Notification No. 29/2010-Cus., dated 27-2-2010] Spl. CVD - Exemption to specified goods In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of description specified in column (3) of the Table below, falling within the Chapter, heading, sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as are specified in the corresponding entry in column (2) of the said Table, when imported into India, from so much of the additional duty of customs leviable thereon under sub-section (5) of section 3 of the said Customs Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the Table aforesaid :- TABLE S. No. Chapter, heading, sub-heading or tariff item of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Notification reads as under: "In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods of the description specified in Column (3) of the Table below read with the relevant List appended hereto, as the case may be, and falling within the Chapter heading or sub-heading or tariff item of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the Central Excise Tariff Act), as are given in the corresponding entry in column (2) of the said Table, from so much of the duty of excise specified thereon under the First Schedule to the Central Excise Tariff Act, as is in excess of the amount calculated at the specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions specified in the Annexure to this Notification, and the condition number of which is referred to in the corresponding entry in column (5) of the Table aforesaid". S. No. Chapter or heading or sub-heading or tariff item of the First Schedule Descript ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt sale price of the wholesale package or per tonne equivalent retail sale price of the standard packages, whichever is higher, shall be taken into consideration for determining the rate of duty : Provided also that where the retail sale price of the goods are not required to be declared under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and thus not declared, the duty shall be determined as is in the case of goods cleared in other than packaged form." 8. The effective rate of CVD for Ordinary Portland Cement under the various clauses of the above exemption Notification, as amended and applicable to the disputed period, is captioned in paragraph 8 of the Show Cause Notice, which reads as under: S. No. to Notification 7.12.2008 to 26.02.2010 27.02.2010 to 28.02.2011 01.03.2011 to 04.04.2011 05.04.2011 to 16.03.2012 Amending Notification No. 58/2008-C.Ex. dated 07.12.2008 10/2008-C.Ex. dated 27.02.2010 04/2011-C.Ex. dated 01.03.2011 1A (i) Rs. 230/- per tonne Rs. 290/- per tonne 10% Adv + Rs. 80/- per tonne 10% Adv + Rs. 80 per tonne 1A (ii) 8% of RSP 10% of RSP 10% Adv + Rs. 160/- per tonne 10% Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional consumer, this concession is also not available. From the foregoing it appeared to the Department that:- (i) M/s. Universal Suppliers, Poovanvilai have imported Cement in 50 kg bags with MRP as Rs. 190/- declared on them. (ii) M/s. Universal Suppliers, Poovanvilai have suppressed and mis-declared the actual Retail Selling Price of the cement imported by them in order to evade payment of appropriate duty. (iii) The actual RSP is more than Rs. 190/- per 50 kg bag including the overheads, duty, sales tax, etc. and the purchase price of the cement bags. (iv) The concessional rate of duty under Sl. No. 1C of Notification No. 4/2006-CE has been availed by M/s. Universal Suppliers, Poovanvilai for some of their import of Ordinary Portland Cement for which they were not eligible to avail the exemption as per the notification in as much as they neither satisfy the conditions of Industrial Manufacturer nor Institutional Manufacturer. (v) The concessional rate of duty under Sl. No. 1C of Notification No. 4/2006-CE has been wrongly availed by M/s. Universal Suppliers, Poovanvilai for some of their import of Ordinary Portland Cement by misdeclaring the RSP as Rs. 190/- pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fty Eight only) under Section 28 (4) of the Customs Act, 1962 and order to pay the interest under Section 28AA (1) at the applicable rate as provided under Section 28AA (2) of the Customs Act, 1962. vii. I order appropriation of an amount of Rs. 2,57,738/- and Rs. 2,50,000/- paid vide two demand drafts DD No. 282603 dated 24.08.2011 issued by M/s. Bank of Baroda, Tuticorin and DD No. 489382 dated 08.09.2011 issued by M/s. Vijaya Bank, Tuticorin towards the part payment of differential duty and order payment of the balance amount by the importer. viii. I impose a penalty equal to the duty sought to be evaded i.e., Rs. 1,37,51,558/- on the Importer viz., M/s. Universal Suppliers, Poovan Villai under Section 114A of the Customs Act, 1962. ix. I do not impose any penalty on the M/s. Universal Suppliers, Poovan Villai under Section 112 (a) of the Customs Act since as per the fifth proviso to Section 114A, no penalty can be imposed under Section 112 when any penalty is imposed under Section 114A. Aggrieved by the above order, the appellant is now before the Tribunal. 13.1 Learned Counsel Shri N. Viswanathan appeared and argued on behalf of the appellant. It is submitted by him th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has merely adopted the RSP of another manufacturer of cement viz. M/s. India Cements Ltd., to enhance the value and deny the concession rate, which is not permissible under law. 13.4 The appellant is engaged in the manufacturing activity of cement hollow blocks/bricks and consumed the imported goods by himself. Though the Department alleges that the appellant has sold the imported cement to other persons, they have not been able to establish as to whom it was sold or how much quantity was sold by the appellant. 13.5 Most of the earlier imports were made prior to 08.04.2011 when there was no self-assessment and the imports were then cleared by the Officers only after verification of RSP declared on the bags and consequential assessment. That the subsequent demand of differential duty under Section 28(4) of the Act vide Show Cause Notice dated 25.09.2013, invoking the extended period of limitation, cannot sustain as the allegation of mis-declaration fails. 13.6.1 It is also submitted by the Learned Counsel that although the Department alleges that the appellant is not eligible for the concessional rate of CVD for the reason that the RSP at which the appellant has sold the cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1A(ii) (19 Bills-of-Entry), which is evident from paragraph 4 of the statement of facts in the appeal memorandum. It is submitted by the Learned Counsel for the appellant that the benefit of the various clauses in the Notification No. 04/2006-C.E. was availed on the basis of the directions issued by the Assessing Officers. 13.9.2 He submitted that the last five Bills-of-Entry filed on 20.08.2011, were filed seeking assessment under Sl. No. 1A(ii) of Notification No. 04/2006-C.E. at the rate of 10% Adv plus Rs. 160/- per tonne and also availing the benefit of exemption from SAD in terms of Notification No. 29/2010-Cus. On all the packaged goods it was marked that they were intended for retail sale and the RSP was also declared. That this was in compliance with the Standard of Weights and Measures Act, 1976 or the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, which require to declare the RSP on the package. The goods were seized on the pretext that it was not only sufficient that the Retail Sale Price be affixed on the pre-packaged goods, but also it should be sold in the retail market on payment of VAT; the goods were seized alleging that they were inten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri S. Balakumar, appearing on behalf of the Department, supported the findings in the impugned order. He submitted that the appellants have claimed exemption of SAD as per Notification No. 29/2010-Cus. dated 27.02.2010. That this exemption is only available for "pre-packaged goods intended for retail sale 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 being in force, to declare on the package thereof the retail sale price of such article." It is clear from the above Notification that it is not sufficient to only declare the RSP on the pre-packaged goods, but it should also be sold in the retail market by discharging VAT; in the present case, the appellant has imported the goods for captive consumption and had not intended to discharge VAT and for these reasons, the denial of exemption of SAD is legal and proper. 14.2.1 It is submitted by the Learned Authorized Representative for the respondent that the appellant had earlier imported cement, by availing exemption at concessional rate of CVD under Notification No. 04/2006-C.E. dated 01.03.2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold to the ultimate consumer and includes all taxes, local or otherwise, freight transport charges, commission payable to the dealers and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be and the price so printed is the sole consideration for the sale. That Shri J.S. Sundar Singh, Proprietor of the appellant, has deposed on 23.08.2011 that the Retail Sale Price of cement in the past 2-3 years in the local market was Rs. 230/- to Rs. 235/- and that at the time of the investigation it was Rs. 250/-; It is proved and established by the Department that the RSP of cement at that time was higher than Rs. 190/- per 50 kg bag. That it is clear from this that the RSP at which the appellant has sold the cement is not Rs. 190 per 50 kg bag and therefore, the appellant is not eligible to avail the concessional rate of duty as per clause 1A(i) of Notification No. 04/2006-C.E. 14.3.2 He referred to paragraph 29 of the impugned order and argued that though the appellant contends that the cement was used for the manufacture of hollow bricks/blocks and thereby captively consumed, this is factually incorrect. That the Range Superintendent was directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SAD) is levied to counter-balance the sales tax, value added tax, etc., when the goods are imported into India. The appellants have claimed concessional rate of duty (CVD/SAD) vide the above stated Notifications. 17. The genesis of the litigation which resulted in the issuance of the Show Cause Notice dated 25.09.2013 is when the appellant filed the five Bills-of-Entry dated 20.08.2011 for the import of cement claiming exemption of SAD vide Sl. No. 1 of Notification No. 29/2010-Cus. dated 27.02.2010. The said Notification has already been reproduced above. The allegation of the Department for denying the exemption of SAD is that the appellant, although has declared the RSP on the packages, has imported the goods for use in his own factory and did not intend to discharge VAT for the goods. It is also alleged that unless VAT is paid, the said exemption of SAD is not available. On perusal of the above Notification No. 29/2010-Cus., it is clearly seen that there is no whisper in the Notification that the exemption would be eligible only if VAT is discharged. Needless to say that at the time of import, any importer would not be able to produce evidence for payment of VAT. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven in the Notification. When RSP is declared on a package, the said amount includes all the charges. So also, a number of standard packages with RSP can be cleared as wholesale package. Such retail price declared on goods takes in all other charges. The Department cannot do a guesswork of various charges and assume that the cement has been sold at a price higher than Rs. 190/-. There is no evidence in the nature of reliable statement of any buyer or invoices to establish that appellants sold the cement at higher price. 22. It is stated in paragraph 13 of the impugned order that the Proprietor of the appellant deposed that the Retail Sale Price of cement in the local market is Rs. 230/- to Rs. 235/- in the past 2-3 years. However, there is no evidence that Shri J.S. Sundar Singh, Proprietor, sold the imported cement at such higher rates. The Department has not been able to gather any evidence that the imported cement has been sold at a rate higher than Rs. 190 per 50 kg bag by the importer. 23. The benefit of exemption under clause 1C of Notification No. 04/2006-C.E. has been denied alleging that the appellant has not used the imported cement captively and that there was no manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s there is evidence to prove that the appellant has sold the cement at the higher rate, the Department cannot allege suppression of facts to invoke the extended period of limitation. 26.1 When RSP is declared on a pre-packaged commodity, the said price is the transaction value, unless there is evidence to show that it is not so. There must be some evidence to show that foreign supplier has received a higher amount. In the present case, the RSP declared is rejected stating that it is sold at a higher rate. In the absence of invoices to show that it was sold by the appellant at higher rate, the Department has proceeded to enhance the value on the basis of invoices of M/s. India Cements Ltd. The invoices of M/s. India Cement Ltd., their ER-I returns, etc., are seen produced by Department. We do not understand under which provisions of the Customs Valuation Rules these documents can form the basis for enhancement of value. The said factory clears goods on the assessable value arrived at by the company based on various factors. Here, the cement is imported from Pakistan. The sale price of M/s. India Cements Ltd. for the cement cleared from the factory cannot be superimposed on the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial number 1C of Notification No. 04/2007-CE. The relevant portion of the judgement is reproduced as under : "2. The brief facts of the case are that the assessee-appellants are manufacturer of the cement. They are selling the cement to the agencies on MRP basis, but in some cases selling directly to the consumers which includes the Government agencies, builders, institutions and individuals. When the goods are sold directly to the above-mentioned entities, then the assessee-appellants claimed that the MRP based exemption should be provided and they are entitled to avail the concessional rate of duty. 3. In the impugned order, the concessional rate of duty under Serial No. 1C of the Notification No. 4/2007-C.E., dated 1-3-2007 for clearances of packaged cement made by the parties to the institutional and industrial consumers was allowed, but the same was not allowed to the individuals. Hence, both the parties have filed the cross appeals. 4. With this background, we have heard Ms. Pinky Arora, learned counsel for the assessee-appellants and Shri Yogesh Agarwal, learned DR for the Department. 5. After hearing both sides and on perusal of the record, it appears that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No contrary evidence that purchase is from a trader has also been submitted by the Revenue. 7. Regarding the second issue of actual user condition for the imported cement, we note that the appellants all along claimed fulfilment of such condition. Though same is post-importation, actual use based condition, the assessments were finalized accepting the claim of the appellant for such concessional duty. It would appear that officers had opportunity to satisfy themselves about the actual user condition. In case of possible doubt on such fulfilment, the requirement is to resort to provisional assessment and call for post-importation actual user confirmation. This was not done in the present case which will show that the assessing officer is satisfied with the claim made by the appellants. The Revenue can initiate demand proceedings of differential duty by denying the exemption later, only upon unearthing the evidences of misuse of such end-use condition. Such evidences have not been brought before us. The impugned orders observe that the appellants failed to establish actual user. No such condition regarding manner establishing such fact was put at the time of assessment and cleara ..... 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