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TMI Blog2023 (3) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.10.2010 against above demand. (ii) I confirm the demand of interest of Rs. 17,81,869/- on the above said differential duty under Section 28 AB of the Customs Act, 1962 against M/s Essel International Ltd., New Delhi and order for appropriation of the amount already deposited vide TR-6 Challans dated 12.10.2010 and 30.10.2010 against above demand. (iii) I impose a penalty of Rs. 50,00,000/- (Rs. Fifty lacs only) under Section 112(a) and (b) of the Customs Act, 1962 on M/s Essel International Ltd., New Delhi, and order for appropriation of amount already deposited by M/s Essel International Ltd., New Delhi vide TR-6 Challans dated 13.10.2010 and 30.10.2010 against this penalty." 2. The appellant imported Set Top Boxes for television sets and sold them to M/s Dish TV Limited. Goods which are imported into the country are chargeable to Basic Customs Duty as per Section 12 of the Customs Act at the rates applicable as per Customs Tariff. They are also chargeable to Additional Duty of Customs as per Section 3 of the Customs Tariff, 1975 at the rates of excise duty applicable to such goods manufactured in India. Thus, the additional duty of customs, is a duty of customs but is le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price for the purposes of this section. Explanation 1.-For the purposes of this section, "retail sale price" means the maximum price at which the 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 dealers, and all charges towards advertisement, delivery, packing, forwarding and the like and the price is the sole consideration for such sale: Provided that in case the provisions of the Act, rules or other law as referred to in sub-section (1) require to declare on the package, the retail sale price excluding any taxes, local or otherwise, the retail sale price shall be construed accordingly. Explanation 2.-For the purposes of this section,- (a) where on the package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale prices shall be deemed to be the retail sale price; (b) where the retail sale price, declared on the package of any excisable goods at the time of its clearance from the place of manufacture, is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at which the appellant sold to M/s Dish TV. The appellant contested the SCN but the demand was confirmed and on appeal before this Tribunal, the matter was remanded to the original authority by Final Order No. 53423 of 2017 in Customs Appeal No. 640 of 2011. Paragraphs 5, 6 and 7 of which are reproduced below: "5. We have heard both the sides and perused appeal records. The basic facts of the case are not disputed. The appellants imported the impugned items with a declared MRP printed at Rs. 1,000/- per piece. They have sold the said items to M/s. Dish T.V. India Ltd. for Rs.2,100/- per piece. We note, the said sale price is more than double, even though the transaction is in bulk, for 10,000 pieces. Further, M/s.Dish T.V. sold the impugned goods to the distributors at Rs.741/- per piece who further sold it to sub-distributor at Rs.761/- per piece. We note, there is evidence on record that the ultimate retail consumer purchased the set top box at Rs.961/- per piece. We note that the chain of transaction starting from import up to consumption by the retail buyer is having price variations of wide range, which cannot be explained by a linear business sale transaction. Admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder as it stands, cannot be sustained. The matter requires re-consideration and accordingly, the appeal is allowed and matter is remanded back to the original authority for a fresh consideration. The appellant shall be given adequate opportunity to present their case before a decision is taken." 6. On remand, the Commissioner passed the impugned order aggrieved by which the present appeal is filed. The main issue which falls for consideration is if differential additional duty of customs can be demanded from the appellant reckoning Rs. 2,100/- as the RSP. The other related issues to be decided are the demand of interest and imposition of penalty under Section 112. 7. Learned counsel for the appellant contested the impugned order and the demand on two grounds. Firstly, it is his submission that although the appellant had declared them retail sale price and assessed the bill of entry under Section 4A, in respect of identical products, it was decided by this Tribunal in Bharti Telemedia Ltd. Vs. Commissioner of Customs (Import), Nhava Sheva [2016 (331) ELT 138 (Tri.-Mumbai)] that there is no retail sale in use of the set top box by ultimate consumers and, therefore, Section 4A will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of consumption of the commodity contained therein and includes the imported packages: Provided that for the purposes of this clause, the expression "ultimate consumer" shall not include industrial or institutional consumers. (q) "retail sale" in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales agencies or other instrumentalities for consumption by an individual or group of individuals or any other consumer." (r) retall sale price means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer and where such price is mentioned on package, there shall be printed on the packages the words [Maximum or Maxi. Retail price..............inclusive of all taxes or in the Form M.R.P. Rs............... inclusive of all taxes." 10. It is his submission that in terms of Rule 2A of SWM rules, the provisions of Chapter-II of the Rules including Rule 6 which mandates declaration of RSP would not apply to packaged commodities meant for industrial consumers or institutional consumers. As per the Explanation to Rule 2A, "institutional consumers" means consumers who buy packaged commodities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s Bharti Telemedia must be followed for assessment of excise duty or CVD on imported STB where the circumstances are identical. In this case the circumstances are not identical as the appellant had imported set top boxes and sold them to Dish TV and there was a sale price. 14. On the second question of whether Rs. 2,100/- can be considered as the retail sale price learned authorised representatives rely on the explanation to Rule 2A of the SWM Rules 1975 which defines "institutional consumers" as those who buy packaged commodities directly from the manufacturer/packers for service industry. It is their submission that the importer is not the manufacturer or a packer of STBs and therefore, buying from an importer does not fall under this definition. Therefore, Dish TV cannot be considered as an institutional consumer. They also rely on the Rule 23(1) and (2) of such Rules which state that no retail dealer or any other person including manufacturer, packer and wholesale dealer shall make any sale of any commodity in packed form at price exceeding the retail sale price thereof. It is, therefore, their submission that once the goods have been sold at Rs. 2,100/- it cannot be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 4A has not been assailed by the appellant by filing an appeal before Commissioner (Appeals). 16. We have considered the submissions on both sides and perused the records. There are only two questions before us. The first question is should the additional duty of customs be assessed as per Section 4 or Section 4A of the Central Excise Act and the second is if assessment is done under Section 4A if Rs. 2,100/- can be taken as RSP. It is not in dispute that set top boxes were notified under SWM rules and therefore, notification applies to the set top boxes which were imported. However, assessment under Section 4A applies only if the SWM Act read with the SWM Rules applies to the goods being assessed. Even if the goods are notified under Section 4A but the SWM Act and Rules requiring RSP to be declared do not apply, Section 4A will not apply. For instance, if the goods are notified but a particular manufacturer or importer does not sell the goods directly or indirectly to consumers but sells them to only industrial consumers or institutional consumers, then the SWM Rules do not apply and RSP does not have to be declared. Consequently, such manufacturer or importer will have to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the price at which the goods were sold to Dish TV cannot be considered as retail sale price. 19. Further, we find that in the case of Bharti Ltd. set top boxes were imported and used to provide service to the customers and it was held that they are not covered under Section 4A for the reason that there was no sale to the subscribers. The present case is identical except that the appellant themselves were not providing the service but were selling the STBs to M/s Dish TV which was providing the service. In our considered view, Dish TV cannot be considered as retail buyer because it is not using the goods for itself but is using them to provide service to its subscribers. Therefore, the price of Rs. 2,100/- at which the goods were sold to Dish TV cannot be considered as retail sale price even if the assessment is not modified and continues to be under Section 4A as was done in this case. The assessment should correctly be done under Section 4 as per Bharti Telemedia. Assessment in this case was done under Section 4A as per RSP with abatement as decided by the assessing officer of Rs. 1465/-. We find that the assessing officer has rejected declared RSP of Rs. 1000/- per set top box ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SWM Rules which reads as follows: "No retail dealer or other person including manufacturer, packer and wholesale dealer shall make any sale of any commodity in packed form at a price exceeding the retail sale price thereof. Explanation : for the removal of doubts, it is hereby declared that a sale, distribution or delivery by a wholesale dealer to a retail dealer or other person is a "retail sale" within the meaning of this sub-rule." It is submitted that since nobody (not just the retailer) can sell any goods at a price above RSP, and since the appellant sold the Dish TV at Rs. 2,100/- this amount cannot be said to be higher than the RSP. Therefore, RSP should be taken as Rs. 2,100/-. Learned authorised representatives also argued that once the appellant themselves have self assessed additional duty under Section 4A, it is not open for them to question the applicability of Section 4A. We have already discussed and found that there is no retail sales but only institutional sales in this case and we find nothing in Rule 23(2) that permits sale price to institutional buyers to be reckoned as retail sale price. It is true that assessment (both self assessment and re-assessment) w ..... 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