TMI Blog2021 (10) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... ief that it was not intended for retail sale and that the appellant-importer did not intend to discharge VAT on the imported goods. Such apprehension of the Department appears to be highly illogical and too premature. At the time of filing the Bills-of-Entry, the Department cannot assume events that are likely to happen later. If the conditions of the Notification are satisfied, the importer has to be given the benefit of the concession / exemption. The only condition stipulated in the Notification No. 29/2010-Cus. is that the RSP has to be declared on the pre-packaged goods, as required under the Standards of Weights and Measures Act/Rules - When the goods were in pre-packaged form and RSP affixed upon them, the condition required in the Notification stands satisfied at that stage of import. The Department cannot assume that the goods are imported with the intention for self-consumption only and proceed to deny the exemption. The main ground for denying the exemption provided under various clauses of the Notification No. 04/2006-C.E. dated 01.03.2006, as amended, is that though the RSP is affixed as ₹ 190 per 50 kg bag on the imported goods, the appellants have sold the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars (in Rs.) 01 4415401 / 20.08.2011 280 929439.88 146132.60 02 4415394 / 20.08.2011 560 1858879.75 292265.30 03 4415403 / 20.08.2011 140 464719.92 73066.30 04 4415399 / 20.08.2011 280 929439.88 146132.60 05 4415416 / 20.08.2011 420 1394159.79 219198.90 2. The cement so imported was in 50 kgs packages with the MRP affixed on the packs as ₹ 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-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Sundar Singh, Proprietor of the importer-firm, was recorded on 23.08.2011 who stated that they purchased cement on High Sea Sales and that they had neither paid VAT nor SAD for the cement consumed by them in their factory and also sold by them. That he agreed to pay the differential duty. 5. The entire consignment in 60 containers under the five Bills-of-Entry were seized under a Mahazar dated 26.08.2011 on reasonable belief that the importer had filed Bills-of-Entry with the intention to evade payment of 4% SAD. Later, search was conducted in the importer s premises and also a report dated 06.09.2011 was called for from the Range Superintendent so as to ascertain whether the importer was engaged in manufacturing activity in the premises at Poovanvilai, Kollamcode, Kanyakumari. 6. The importer paid differential duty of ₹ 2,57,738/- on 24.08.2011 and ₹ 2,50,000/- on 08.09.2011. They also executed Bond for ₹ 60,00,000/- and the goods were provisionally released to the importer on 08.09.2011. 7. Further, during this period, exemption was available for the Countervailing Duty (CVD) for import of Ordinary Portland Cement in terms of Notification No. 04/2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valent retail sale price not exceeding ₹ 3800; ₹ 350 per tonne - 1B 2523.29 All goods, manufactured in a mini cement plant, other than those cleared in packaged form; ₹ 250 per tonne 1 1C 2523.29 All goods, whether or not manufactured in a mini cement plant, not covered in S. No. 1B, other than those cleared in packaged form; ₹ 400 per tonne - Explanation. - For the purposes of S. Nos. 1, 1A, 1B and 1C- 1. mini cement plant means - (i) a factory using vertical shaft kiln, with installed capacity not exceeding 300 tonnes per day or 99,000 tonnes per annum and the total clearances of cement product by the factory, in a financial year, shall not exceed 1,09,500 tonnes; or (ii) a factory using rotary kiln, with installed capacity not exceeding 900 tonnes per day or 2,97,000 tonnes per annum and the total clearances of cement produced by the factory, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8% of RSP 10% of RSP 10% Adv + ₹ 160/- per tonne 10% Adv + ₹ 160/- per tonne 1B Applicable for cement manufactured from Mini Cement Plants 1C From 07.12.2008 to 26.02.2009 10% Adv or ₹ 290/- per tonne whichever is higher. From 27.02.2009 to 26.02.2010 8% Adv or ₹ 230/- per tonne whichever is higher 10% Adv or ₹ 290/- per tonne whichever is higher 10% Adv 10% Adv 9. Though the appellant had earlier imported cement by declaring RSP as ₹ 190/- on each 50 kg bag as per the Notification, RSP means the maximum retail price at which excisable goods in packaged form may be 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, packing, forwarding, etc., and the price so printed is the sole consideration for sale It appeared that the charges in the above nature are to be added to the assessable value. If these ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfy 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 ₹ 190/- per 50 kg bag to evade payment of duty at higher rate (under Sl. No. 1A(ii) of above said Notification). (vi) Exemption under Sl. No.1 of Notification No. 29/2010-Cus. from payment of SAD has been wrongly availed by M/s. Universal Suppliers, Poovanvilai though VAT had not been paid on subsequent sales and the actual sales had not been effected to the Industrial or Institutional buyers on payment of VAT. (vii) M/s. Universal Suppliers, Poovanvilai has wilfully and knowingly mis-declared the RSP details on the packages to evade the appropriate Customs duty as explained in the previous paras and as such Section 28(4) of the Customs Act, 1962 is rightly invokable and thus rendered themselves liable for penal action under Section 112(a) and 114A of the Customs Act, 1962. 12. The importer was issued Show Cause Notice dated 25.09.2013 raising the above allegatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illai 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 that the Department has denied the concessional rate of SAD claimed by the appellant under Notification No. 29/2010-Cus. dated 27.02.2010. In respect of the five Bills-of-Entry dated 20.08.2011, the said goods were provisionally released on payment of SAD to the tune of ₹ 2,57,738/- on 24.08.2011 and ₹ 2,50,000/- on 08.09.2011, besides executing bond for ₹ 60,00,000/-. In the present Show Cause Notice, apart from the above five Bills-of-Entry, differential duty (CVD) has been demanded in respect of imports made earlier by the appellant. The Show Cause Notice as well as the Order-in-Original thus pertains to 108 Bills-of-Entry (including the five Bills-of-Entry for the live consignment), by which the appellant had imported Ordinary Portland Cement. In respect of the earlier imports, the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 bags is higher than ₹ 190/-, the demand of SAD in respect of the five Bills-of-Entry has been made alleging that the appellant has not captively consumed the goods and had sold the cement without payment of VAT. The allegations in the Show Cause Notice are completely self-contradictory. 13.6.2 It is submitted by him that the entire imported cement was consumed by the appellant himself and not sold to outsiders; the appellant is therefore eligible for the concessional rate of CVD in terms of clause 1C of Notification No. 04/2006-C.E. 13.7 Without prejudice to his above arguments and also the incorrectness of the allegations made by the Department, Learned Counsel for the appellant submitted that even if some quantity of imported cement was sold by the appellant, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 intended to be sold without payment of VAT by way of captive consumption. The seizure is totally bad, incorrect and premature as it is not possible for the Customs authorities, at the time of assessment, to decide whether the goods would be sold/not sold or captively consumed. The whole proceedings involving the seizure of imported goods is void and vitiated and therefore, liable to be set aside. 13.9.3 It is also submitted by the Learned Counsel for the appellant that paragraphs 29 to 31 of the impugned order reveal non-application of mind by the Adjudicating Authority. That, on the one hand, the authority held that the appellant used the cement for the manufacture of hollow blocks whereas on the other hand, held that the appellant has sold some cement to bulk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging 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, as amended. The said Notification prescribes different rates of CVD for cement under different clauses viz. 1A(i), 1A(ii), 1B and 1C. The exemption available as per the above Notification is as under: (a) The concessional rate of duty under clause 1A(i) for the cement whose Retail Sale Price does not exceed ₹ 190/- per 50 kg bag. (b) The concessional rate of duty under clause 1A(ii) for the cement whose Retail Sale Price exceeds ₹ 190/- per 50 kg bag. (c) The concessional rate of CVD under clause 1B of the Notification No. 04/2006-C.E. dated 01.03.2007 o the cement which is purchased from a mini cement plant, other than those cleared in packaged form which is having a manufacturing capacity of: (i) A factory using vertical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the appellant has sold the cement is not ₹ 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 directed to file a report after ascertaining whether any manufacturing activity is undertaken in the appellant s premises. In the report of the Superintendent of Customs, Customs Preventive Unit, Nagercoil dated 06.09.2011, it is stated that there is no manufacturing activity or storage facility in the premises of the appellant. That from this, it is established that the appellant has not consumed the cement captively, for his own use. 14.4 Further that, the concessional rate of duty under clause 1A(ii) of the Notification is available to the imported cement whose Retail Sale Price exceeds ₹ 190 per 50 kg bag. That in the present case, since the appellant has declared the RSP as ₹ 190 per 50 kg bag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 such condition in the Notification. 18. The consignments were seized and confiscated under the belief that it was not intended for retail sale and that the appellant-importer did not intend to discharge VAT on the imported goods. Such apprehension of the Department appears to be highly illogical and too premature. At the time of filing the Bills-of-Entry, the Department cannot assume events that are likely to happen later. If the conditions of the Notification are satisfied, the importer has to be given the benefit of the concession / exemption. The only condition stipulated in the Notification No. 29/2010-Cus. is that the RSP has to be declared on the pre-packaged goods, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in the local market is ₹ 230/- to ₹ 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 ₹ 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 manufacturing activity. It is also stated that the appellant is neither an industrial consumer nor an institutional consumer and therefore the benefit under clause 1C of the Notification would not be available. On the contrary, the benefit of concessional rate of duty under clause 1A(i) of the Notification has been denied alleging that the appellant has sold the cement to retail consumers at a rate higher than ₹ 190/- per 50 kg bag. Even after careful perusal of records, we utterly fail to understand the basis of allegations or the fact finding made by the authorities below; the assumption by the Department is that the imported cement ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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 goods imported from another country. Needless to say, that when RSP is declared, Section 4A of the Central Excise Act, 1944 comes into application and Excise Duty has to be discharged on the RSP only. We cannot agree with the view of the Adjudicating Authority that when such other charges are included, the RSP will be higher than ₹ 190/- and therefore importer has sold at higher price. These are nothing but surmises. 27. This Tribunal in the M/s. Antony Metals (supra) vide Final Order Nos. 40323 to 40332 of 2019 dated 19.02.2019 had occasion to analyse cases involving similar set of facts wherein the claim of concessiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee-appellants have sold the goods directly to the consumer which includes the Government agencies, builders, institutions and individuals without involving a retail sale agency or other institutions, and has, therefore, not fulfilled the criteria of retail sale . Hence, the definition of Retail Sale as per Rule 2(q) of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 will not apply. This ratio was laid down by this Tribunal in a number of cases which includes Prism Cement Ltd. v. CCE, Bhopal, Final Order Nos. 53855-53856/2016, dated 28-9-2016, wherein it was observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 clearances. The claim in the Bills of Entry at the time of import as well as in the written submissions made before the lower authorities by the appellant-importer categorically states about not selling the imported product to any other person. No evidence to that effect has also been brought by the Revenue. In such situation, the eligibility to the CV duty concession as claimed by the appellant during the material time cannot be questioned much later without any evidence. 8. In view of above discussion and analysis, we find that there is no merit in the impugned orders denying ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
